People who use their cars for work will be able to deduct more money per mile on their taxes in the new year.

The Internal Revenue Service (IRS) announced this week that the standard mileage rate for business driving will increase by 2.5 cents per mile. Additionally, vehicles used for medical purposes will decrease by half a cent, which the agency said reflects “updated cost data and annual inflation adjustments.”

The standard mileage rate is an IRS-set figure, which is expressed in cents per mile, that is used to calculate the deductible costs of using a personal vehicle for business purposes when filing federal income taxes. Self-employed individuals, gig workers, freelancers, and small businesses who use personal vehicles for business can claim the standard mileage deduction on their tax returns. However, the standard mileage rate is also calculated for vehicles used for medical purposes, moving purposes for active duty members and for charity work.

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