Mileage Rates for 2024 Announced by IRS -Updated

The IRS has recently released the optional standard mileage rates for 2024. These rates are used to determine deductible costs when using a vehicle for business, charity, medical, or moving purposes. The rates are applicable to a wide range of vehicles, including those powered by gasoline or diesel, as well as hybrid and electric vehicles. The new rates, effective from January 1, 2024, are as follows:

  • Business use: 67 cents per mile, an increase of 1.5 cents from 2023.
  • Medical purposes or relocation (for qualified active-duty military personnel): 21 cents per mile, a decrease of 1 cent from the previous year.
  • Charitable service: 14 cents per mile, a rate that remains unchanged from 2023 and is set by statute.

Importantly, the Tax Cuts and Jobs Act has stipulated that most taxpayers are ineligible to claim miscellaneous itemized deductions for unreimbursed employee travel expenses. Furthermore, moving expense deductions are only available to active-duty members of the military who are relocating due to official orders.

Taxpayers are free to use the standard mileage rate for their vehicle expenses if they so desire. This decision is typically made during the first year of using the car for business-related purposes. Once this choice has been made, taxpayers have the flexibility in subsequent years to choose between the standard mileage rate or calculating actual expenses. If a taxpayer has leased their vehicle, they are required to use the standard mileage rate consistently throughout the entire lease period, including any renewals or extensions.

For more comprehensive information, please refer to IRS Notice 2024-08. This notice provides the 2024 standard mileage rates and information on maximum automobile costs for a variety of tax purposes. If you have any queries about how these updates might impact your tax circumstances or need help deciding the most advantageous method for handling your vehicle expenses, don’t hesitate to reach out, our team of professionals is ready to assist.