Standard Mileage Rates for 2024
The IRS has just released the updated standard mileage rates for 2024, which are crucial for calculating deductible expenses associated with vehicle usage for business, charitable, medical, or moving purposes. These rates, effective from January 1, 2024, play a key role in assisting tax preparers and their clients in accurately determining deductions related to vehicle usage.
For business-related mileage, the standard rate is now 67 cents per mile, reflecting a 1.5 cent increase from the previous year.
In cases of medical or moving purposes, particularly for qualified active-duty members of the Armed Forces, the rate has decreased to 21 cents per mile, down by 1 cent from 2023.
The rate for charitable activities remains unchanged at 14 cents per mile, as mandated by statute.
Vehicles for Which the Rate Applies
It's essential to note that these rates apply to various vehicle types including:
Other Recent Changes
Taxpayers should be aware of recent changes under the Tax Cuts and Jobs Act, which impact the eligibility for miscellaneous itemized deductions related to unreimbursed employee travel expenses.
Additionally, deductions for moving expenses are generally disallowed unless the individual is an active-duty member of the Armed Forces moving under orders to a permanent change of station.
How to Calculate Vehicle Expenses
Taxpayers have the flexibility to choose between calculating actual vehicle expenses and utilizing the standard mileage rates. If opting for the standard rates, individuals typically commence usage in the first year the car is employed for business purposes.
Subsequently, they have the option to decide between the standard mileage rate and actual expenses on an annual basis. In the case of leased vehicles, adherence to the standard mileage rate method is necessary for the entire lease period if selected.
Further details, including the optional 2024 standard mileage rates, the maximum automobile cost for fixed and variable rate (FAVR) plan allowances, and the maximum fair market value of employer-provided automobiles for personal use in 2024, can be found in Notice 2024-08PDF. This notice also outlines the rules for using the fleet-average valuation and vehicle cents-per-mile valuation methods for employer-provided vehicles.