2024 Deductible Mileage Rate for Business Driving Increases
The Tax-Deductible Mileage Rate for Business Driving Increases for 2024
The Deductible Mileage Rate for Business Driving Increases for 2023
The IRS has announced the 2024 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Background: When you use your vehicle for business purposes, you can typically deduct the actual expenses associated with that business use. This includes common costs like gas, oil, tires, insurance, repairs, registration fees, and licenses. Additionally, you can claim a depreciation deduction for the vehicle based on the percentage of business miles driven. However, be aware that annual write-offs for depreciation are capped for high-value vehicles, and these limits are adjusted for inflation every year.
Don’t want to keep track of every vehicle-related expense? the IRS offers a simpler option: the standard mileage rate. This rate simplifies deductions by eliminating the need to track individual car expenses, though details of business trips (mileage, date, destination, names and relationships of the business parties, and the business purpose of the travel) are still required. The rate is adjusted annually by the IRS.
Beginning on January 1, 2024, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) is:
- 67 cents per mile for business miles driven. For 2023, the business rate is 65.5 cents per mile.
- 21 cents per mile driven for medical or eligible moving purposes. For 2023, the rate is 22 cents per mile so this decreased by 1 cent per mile.
- 14 cents per mile driven in service of charitable organizations. (This amount is set by law and remains unchanged from 2023.)
Employee Travel and Moving Expenses
Important: Under the Tax Cuts and Jobs Act, taxpayers can’t claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they’re members of the Armed Forces on active duty moving under orders to a permanent change of station.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, which includes gas, maintenance, and depreciation. The rate for medical and moving purposes is based on the variable costs as determined by the same study. The charitable rate is set by law.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
Questions about the Deductible Mileage Rate for 2024?
If you have questions about deducting mileage expenses in your situation, consult with your tax advisor.