As tax season approaches in Alabama, understanding the current 2025 IRS mileage rate is essential for both individuals and businesses. Whether you're a self-employed contractor in Birmingham, a delivery driver in Mobile, or a healthcare worker making home visits across Montgomery, knowing how to properly track and deduct your vehicle expenses can significantly impact your tax situation.
The IRS standard mileage rate is a predetermined rate that taxpayers can use to calculate the deductible costs of operating their vehicles for business, charitable, medical, or moving purposes. Instead of tracking actual vehicle expenses (like gas, maintenance, insurance, and depreciation), taxpayers can multiply the standard mileage rate by their eligible miles driven.
For Alabama residents and businesses, the IRS standard mileage rates for 2025 are the same as the national mileage rate.
The business mileage rate of 70 cents per mile applies to:
Alabama business owners can deduct mileage for travel between business locations, client meetings, job sites, and other business-related destinations. However, regular commuting between your home and primary workplace is generally not deductible.
While the 2025 IRS mileage rate is standard nationwide, Alabama taxpayers should be aware of:
To properly claim mileage deductions in Alabama use the Everlance app:
Let's consider an example of an Alabama real estate agent based in Huntsville:
This agent could deduct 17,000 miles (15,000 + 2,000) at the business rate of 70 cents per mile, resulting in a deduction of $11,900 on their federal tax return.
Alabama taxpayers can choose between the standard mileage rate method or the actual expense method. The actual expense method involves calculating the actual costs of operating your vehicle in Alabama, including:
If you use the actual expense method in the first year you use your car for business in Alabama, you cannot switch to the standard mileage rate in later years. However, if you use the standard mileage rate the first year, you can switch between methods in subsequent years.
Understanding and properly utilizing the IRS mileage rates can lead to significant tax savings for Alabama taxpayers. Whether you're driving through the winding roads of the Appalachian foothills or making deliveries in downtown Birmingham, accurate mileage tracking with Everlance and knowledge of deduction rules are essential.
Join over 4 million satisfied drivers who trust our 4.8-star rated mileage tracking app for their business, medical, and charitable driving records. Download our app today from the App Store to start tracking your Alabama mileage automatically and maximize your tax deductions with confidence.
Track your miles, income, expenses and file your taxes right from the top rated mileage and expense tracker!
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Damask is the Content Marketing Lead at Everlance, where she develops engaging content to showcase how Everlance's mileage tracking software help businesses and self-employed professionals track for taxes. She specializes in creating educational resources that demonstrate how users can maximize their savings on business expenses through mileage tracking.
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