IRS Announces 2024 Rates for Deductible Mileage

Date January 19, 2024
Authors Amy L. Dalen
Categories

The Internal Revenue Service has released its “optional mileage rates” for 2024. The rates can be used to calculate the deductible costs of operating a vehicle for business, charitable, medical, or moving purposes. Notably, the rate for business use has been increased 1.5 cents per mile.

As of January 1, 2024, the optional standard mileage rates for electric and hybrid-electric as well as gasoline and diesel-powered cars, vans, and pickup and panel trucks will be:

  • 67 cents per mile driven for business use, an increase of 1.5 cents over the 2023 rate.
  • 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, a decrease of 1 cent from 2023.
  • 14 cents per mile driven in service of charitable organizations, unchanged from 2023.

According to the IRS newswire announcing the 2024 rates, “The standard 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 is based on the variable costs.”

The release added that, in accordance with provisions of the Tax Cuts and Jobs Act of 2017, “taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station.”

The option to calculate the actual costs of using your vehicle for tax reporting purposes remains. If you opt to use the standard mileage rate, you generally must do so in the first year the vehicle is available for business use; you can then choose either the standard mileage rate or actual expenses thereafter. Except for leased vehicles. If you choose the standard mileage rate for a leased vehicle, you must continue to use the rate for the entire lease period, including renewals.

For more information, including how to calculate the allowance under a fixed and variable rate plan and details on vehicles provided by employers to employees for personal use, consult IRS Notice 2024-08.

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