3 Ways You Can Drive Your Car & Cut Your Tax Bill

D. Rhodes, CPA, Writer and Editor

Every mile you drive for your business is money in motion. Last week the IRS published IR-2024-312 which issued IRS Notice 2025-5. This gave business owners a bigger opportunity to turn car miles into tax savings, announcing:

• A standard business mileage rate of 70 cents per mile

• A 21 cent per mile deduction for medical-related travel

• Active duty military can deduct 21 cents per mile for your moving expenses

  
  

The Numbers That Matter to Your Bottom Line

Let's cut straight to what matters: at 70 cents per mile, a 20-mile round trip to the store for products or to deposit cash to your bank, creates a $14 deduction from your taxable income. Do that weekly, and you're looking at $728 in deductions annually just from supply or deposit runs.

What does this mean in tax savings? If you're in the 22% tax bracket, those supply run or cash deposit deductions could save you about $160 in actual tax dollars annually ($728 × 22%). For mobile business owners or those juggling multiple locations, these numbers stack up fast - 100 miles of business driving per week becomes $3,640 in deductions annually, potentially saving $800+ in actual tax payments depending on your tax bracket.

The IRS notice didn't stop at business miles. If you’re managing your own healthcare, there's a 21-cent per mile deduction for medical-related travel. Those pharmacy runs and doctor visits? They're not just necessary – they're tax deductible.

Active duty military receive special consideration too. If you're serving and receive orders to relocate, you can deduct 21 cents per mile for your moving expenses. In an industry where many professionals have military backgrounds, this benefit deserves attention.

Every mile tracked is working capital for your future. Those savings can fund:

• Your shop's expansion

• Investment in premium tools

• Real estate opportunities

• Education for Advanced Services

These rates are effective starting January 1, 2025. The IRS is clear – personal trips don't count. But for business owners who document their miles properly, this change represents a significant opportunity to convert necessary business travel into wealth-building tax benefits. So don't leave money on the table - here's your next steps:

1. Take a picture of your odometer in the beginning of the year. This will make tracking your miles and proving those miles for IRS purposes much more simple.

   
   

2. Track your miles via a mobile app to save time. I personally use QuickBooks to track every trip I drive.

   
   

3. Review your travel patterns. Could some routes be optimized? Combining multiple stops into one trip will maximize both time and deductions.

   
   

4. Consider a strategy of expanding your service radius. That 70-cent deduction means expanding your service area might actually be profitable now.

   
   

5. Consult with a tax professional. Maximize these deductions by working with someone whose sole objective is to see your business grow.

   
   

The road to building wealth isn't about the hours working. It's about maximizing every business decision – including your drives.

The choice is yours, but the clock is ticking. Reach out today so we can help get you from where you're at, to where you want to be. Your move boss.

*This article provides general information, not individual tax advice. Tax situations vary; consult with a qualified tax professional, like myself, for advice specific to your circumstances.