News & Updates

Optional standard milage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving.

Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

• 70 cents per mile driven for business use, up 3 cents from 2024.
• 21 cents per mile driven for medical purposes, the same as in 2024.
• 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
• 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024.

The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.

While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.

Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses.

For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.

Notice 2025-5 PDF contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate (FAVR) plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.

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The IRS continues to improve taxpayer services to help people prepare for tax season with more digital tools and options available. The IRS encourages taxpayers to sign up now for an IRS Online Account to make tax season easier and help safeguard their tax information.

There are a number of things taxpayers can do to get ready as the end of 2024 nears and the start of the 2025 tax season approaches.

The IRS’s Get Ready page on IRS.gov offers practical tips and resources to help taxpayers prepare. It highlights key updates and important steps for taxpayers to consider to make tax filing easier in 2025.

This reminder is part of a series designed to help taxpayers “Get Ready” for the upcoming filing season. Taking action now can reduce stress and ensure a smoother filing process next year.

Do more with an IRS Online Account

Individuals can create or access their IRS Online Account at Online account for individuals. With an IRS Online Account, they can:

• View key details from their most recent tax return, such as adjusted gross income.
• Request an Identity Protection PIN.
• Get account transcripts to include wage and income records.
• Sign tax forms like powers of attorney or tax information authorizations.
• View and edit language preferences and alternative media.
• Receive and view over 200 IRS electronic notices.
• View, make and cancel payments.
• Set up or change payment plans and check their balance.

Get an Identity Protection Personal Identification Number (IP PIN)

An IP PIN is a six-digit number that prevents someone else from filing a federal tax return using an individual’s Social Security number or Individual Taxpayer Identification Number. It’s a vital tool for ensuring the safety of taxpayers’ personal and financial information.

New for the 2025 filing season, the IRS will accept Forms 1040, 1040-NR and 1040-SS even if a dependent has already been claimed on a previously filed return, as long as the primary taxpayer on the second return includes a valid IP PIN. This change will reduce the time for the agency to receive the tax return and accelerate the issuance of tax refunds for those with duplicate dependent returns.

The best way to sign up for an IP PIN is through the IRS Online Account. If an individual is unable to create an Online Account, alternative methods are available, such as in-person authentication at a Taxpayer Assistance Center. More information is available on how to sign up at Get an identity protection PIN (IP PIN).

Deadline for 2024 last quarterly estimated payment is Jan. 15, 2025

Taxpayers with non-wage income—such as unemployment benefits, self-employment income, annuity payments or earnings from digital assets—may need to make estimated or additional tax payments. The Tax Withholding Estimator on IRS.gov can help wage earners determine if they need to make an additional payment to avoid an unexpected tax bill when filing their return.

1099-K reporting changes

Taxpayers who received more than $5,000 in payments for goods and services through an online marketplace or payment app in 2024 should expect to receive a Form 1099-K PDF in January 2025. A copy of this form will be sent to the IRS as well.

Although the IRS is taking a phased in approach to implementation of the Form 1099-K reporting threshold, there have been no changes to the taxability of income. All income, including proceeds from part-time work, side jobs or the sale of goods and services is taxable. Taxpayers must report all income on their tax return unless it's excluded by law, whether they receive a Form 1099-K or not. The law doesn’t allow taxpayers to avoid taxes on income earned just because they didn’t get a form reporting the payments received.

It is important for taxpayers to understand why they received a Form 1099-K and how to use it along with their other records to figure and report the correct amount of income on their tax return. It is also important for taxpayers to know what to do if they received a Form 1099-K but shouldn't have. In either situation, good recordkeeping is key. Having good records will help make tax filing easier.

Prepare to include digital assets on taxes in 2025

Just like previous filing years, taxpayers must report all digital asset-related income when they file their 2024 federal income tax return. A digital asset is property that is stored electronically and can be bought, sold, owned, transferred or traded. Examples include convertible virtual currencies and cryptocurrencies, stablecoins and non-fungible tokens (NFTs).

If a taxpayer had digital asset transactions last year, they should be sure to keep records that prove their purchase, receipt, sale, exchange or any other disposition of the digital assets and that includes the fair market value, as measured in U.S. dollars of all digital assets received as income or as a payment in the ordinary course of a trade or business.

When filing 2024 federal income tax returns, taxpayers will be asked to answer “Yes” or “No” to the following question:

At any time during the tax year, did you:

(a) receive (as a reward, award or payment for property or services); or

(b) sell, exchange or otherwise dispose of a digital asset (or a financial interest in a digital asset)?

Taxpayers should be prepared to answer the question by reviewing the digital assets landing page and FAQ available on IRS.gov. In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. Information on how to report digital asset transactions, including calculating capital gain or loss, determining basis and reporting the income on the correct form can also be found on the digital assets landing page.

Understand refund timing and how to avoid delays

Several factors can influence the timing of a refund after the IRS receives a tax return. While the IRS issues most refunds in less than 21 days, taxpayers are advised not to depend on receiving a 2024 federal tax refund by a specific date for major purchases or bill payments. Some returns may require additional review and take longer to process if there are possible errors, missing information, or indications of identity theft or fraud.

Additionally, under the PATH Act, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. The IRS must hold the entire refund—not just the portion associated with these credits—until the review is complete.

Gather and organize 2024 tax documents

To make tax time easier, taxpayers should establish an effective record-keeping system, either electronic or paper, to organize all important documents in one place. This includes year-end income forms such as Forms W-2 from employers, Forms 1099 from banks or other payers, Forms 1099-K from third-party payment networks, Forms 1099-NEC for nonemployee compensation, Forms 1099-MISC for miscellaneous income, Forms 1099-INT for interest income and records of all digital asset transactions.

Having all necessary documentation ensures taxpayers can file an accurate return and reduces the likelihood of processing delays or refund issues.

Use direct deposit for a faster refund

Filing electronically and selecting direct deposit remains the fastest and safest way for taxpayers to receive their 2024 tax refunds. Direct deposit ensures quicker access to refunds compared to receiving a paper check.

For those without a bank account, resources are available to help. Individuals can learn how to open an account at an FDIC-insured bank or use the national Credit Union Locator tool. Veterans can explore the Veterans Benefits Banking Program for financial services at participating banks.

Tax refunds can also be deposited onto prepaid debit cards or through mobile payment apps, provided they have routing and account numbers. Taxpayers should confirm with the mobile app provider or financial institution which numbers to use when completing their tax return.

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The consumer alert kicks off the ninth annual National Tax Security Awareness Week featuring tips for taxpayers and tax professionals to avoid scams and protect their sensitive data. The special week is part of the Security Summit initiative, a joint effort between the IRS, states, the tax industry and tax professionals that works to protect taxpayers and the tax system against identity theft.

“The holiday shopping season and the fast-approaching tax season create a tempting target for identity thieves and scam artists,” said IRS Commissioner Danny Werfel. “Taxpayers should use extra caution this holiday season to protect their valuable personal and financial information, whether shopping online or clicking on links in email and other messages. A little extra caution can protect taxpayers’ confidential information and reduce the risk of identity theft in the upcoming filing season.”

Abundant scams and rip-offs being seen by the IRS and the Security Summit partners include ever-evolving and increasingly sophisticated phishing emails and related attacks on the unsuspecting. Taxpayers can be duped into unwittingly handing over their confidential tax and financial information. Would-be victims could also get tricked into disclosing their addresses, Social Security numbers, bank account numbers, credit card numbers or passwords, which can lead to tax-related identity theft and fraud.

A common example right now involves false messages made to look like they’re coming from delivery services. In these scams, victims receive a text or email purporting to be from a company or business saying a delivery can’t be made along with a link to click to reschedule. But in reality, the link represents a form of phishing that attempts to steal personal information or download malware. It’s a very prevalent scam expected to intensify during the holidays.

Another common scam expected to intensify soon will involve emails pretending to be from the IRS or others in the tax industry. These frequently involve unexpected, good news, like a tax refund. But they can also involve variants telling people they have a tax bill or have tax documents available to download.

“People need to be extra careful during the holidays and during tax season,” Werfel said. “Identity thieves and tax scammers are shrewd and take advantage of what is on people’s minds, particularly during busy times of the year like the holidays. Remember, don’t click on anything unknown, even if you just ordered gifts and you’re expecting packages to come to your door soon. Double-check before you click.”

The warning is another reminder from the IRS and other Security Summit partners, an ongoing alliance that includes state tax agencies, tax professionals, software and financial industry partners. Since 2015, the IRS and the Security Summit have used this special week to warn taxpayers and tax professionals to protect their sensitive information while shopping online or viewing emails and texts, especially during the holiday season and approaching tax season, when criminals are active.

The Summit partners continue to highlight security and awareness to help taxpayers avoid losing their personal, financial and tax information, which identity thieves use to file fraudulent tax returns.

Safety tips to remember during the holiday season and throughout the year

During the busiest time of the year for online shopping, the Security Summit reminds taxpayers of some important steps to protect themselves and their information from data thieves:

• Shop at online sites with web addresses that begin with the letters “https:” the “s” stands for secure communications. Also look for a padlock icon in the browser window.
• Don't shop on unsecured public Wi-Fi in places like a mall or restaurant.
• Ensure security software is updated on computers, tablets and mobile phones.
• Watch out and help protect the devices of family members who may not be technologically savvy, a wide range that goes from young children to older adults.
• Make sure anti-virus software for computers has a feature to stop malware, and that there is a firewall enabled to prevent intrusions.
• Use strong, unique passwords for online accounts.
• Use multi-factor authentication whenever possible.

Simple steps can protect taxpayers

In addition to those protective steps, taxpayers should be wary of a variety of email scams. Throughout the year, taxpayers should be aware of different types of email phishing scams that identity thieves and scam artists commonly use. These include:

• Phishing/Smishing – Phishing emails or SMS/texts (known as “smishing”) attempt to trick a recipient into clicking a suspicious link, filling out information or downloading a malware file. Often phishing attempts are sent to multiple email addresses at a business or agency, increasing odds that someone will fall for the trick.
• Spear phishing – This is a specific type of phishing scam that bypasses emailing large groups at an organization, instead identifying potential victims and delivering a more realistic email known as a “lure.” These types of scams can be trickier to identify since they don't occur in large numbers. They single out individuals, can be specialized and make the email seem more legitimate. Scammers can pose as a potential client for a tax professional, luring the practitioner into sharing sensitive information.
• Clone phishing – This is a newer type of phishing scam that clones a real email message and resends it to the original recipient pretending to be the original sender. The new message will have either an attachment that contains malware or link that tries to steal information from a recipient.
• Whaling – Whaling attacks are very similar to spear phishing, except these attacks are generally targeted to leaders or other executives with access to large amounts of information at an organization or business. Whaling attacks can target people in payroll offices, human resource personnel and financial offices as well as leadership.

In some cases, when a taxpayer believes their personal information is being used to file fraudulent tax returns, they should consider filing a Form 14039 online, or they can complete the paper Form 14039, Identity Theft Affidavit PDF, which can then be printed and mailed or faxed to the IRS.

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Under the guidance issued today, TPSOs will be required to report transactions when the amount of total payments for those transactions is more than $5,000 in 2024; more than $2,500 in 2025; and more than $600 in calendar year 2026 and after.

Notice 2024-85 also announces for calendar year 2024, that the IRS will not assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax during the calendar year.

TPSOs that have performed backup withholding for a payee during calendar year 2024 must file a Form 945 and a Form 1099-K with the IRS and furnish a copy to the payee.

For calendar year 2025 and after, the IRS will assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax.

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For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.

Here is a complete list of the new rates:

• 7% for overpayments (payments made in excess of the amount owed), 6% for corporations.
• 4.5% for the portion of a corporate overpayment exceeding $10,000.
• 7% for underpayments (taxes owed but not fully paid).
• 9% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during October 2024. See the revenue ruling for details.

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