The Internal Revenue Service has issued the 2024 optional standard mileage rates. These rates are used to determine the deductible expenses associated with driving a car for work, charity, relocation, or medical reasons.
On January 1, 2024, standard mileage rates for using an automobile (including cars, vans, pickups, or panel trucks) will change to the following:
- 67 cents per mile traveled for business purposes (an increase of 1.5 cents from 2023)
- 21 cents per mile for medical or relocation-related driving for eligible active-duty members of the armed forces (a 1 cent drop from 2023)
- A statutory tax of 14 cents per mile traveled in support of charity organizations (unchanged from 2023)
These rates apply to gasoline and diesel-powered cars, as well as electric and hybrid vehicles.
Unreimbursed employee travel expenditures are not eligible for a miscellaneous itemized deduction under the Tax Cuts and Jobs Act for taxpayers. Additionally, unless they are active-duty members of the armed forces relocating on orders to a permanent change of station, taxpayers are not eligible to deduct relocation expenditures. Refer to the IRS’s Tax Topic No.455 Moving Expenses for Members of the Armed Forces for further information.
Instead of using standard mileage rates, taxpayers also have the option to calculate the actual cost of operating their cars.
During the first year that the vehicle is available for business use, taxpayers are required to use the standard mileage rate. Later, they will have the option to select between actual expenses and the standard mileage rate. Leased cars are required to use the standard mileage rate for the entire term of the lease (including renewals), if this method is chosen.
Notice 2024-08 includes the maximum automobile cost for determining the allowance under a fixed and variable rate (FAVR) plan, together with the optional 2024 standard mileage rates. Employers may use the fleet-average valuation rule or the vehicle cents-per-mile valuation rule for employee-provided cars starting in the 2024 calendar year. The notice also specifies the maximum fair market value of these vehicles.
Do you have questions about using your vehicle for business? Contact us for help.
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