The IRS issued a slight increase in the standard mileage rates for business travel, effective January 1, 2024. While the IRS states that standard mileage rates can be applied to the use of a car, van, pickup or panel truck used for business purposes, it’s important to note the correct application of the deduction.
The IRS 2024 Mileage Rates for Using a Vehicle for Business Purposes are:
- 67 cents per mile for each business mile (an increase of 1.5 cents per mile from 2023)
- 21 cents per mile to cover moving or medical purposes for qualified active-duty members of the Armed Forces
- 14 cents per mile driven for charitable organizations (unchanged from 2023)
According to the IRS, taxpayers still have the option to calculate the actual costs of using their vehicle rather than using the standard mileage rates.
Depreciation allowances
The portion of the business standard mileage rate treated as depreciation is 27 cents per mile for 2020, 26 cents per mile for 2021 and 2022, 28 cents per mile for 2023, and 30 cents per mile for 2024.
When computing the allowance under a Fixed and Variable Rate (FAVR) plan, the standard vehicle cost cannot exceed $62,000 for autos, trucks, or vans. The same value is used for purposes of the fleet-average and vehicle cents-per-mile valuation rules.
Other noteworthy guidelines issued by the IRS:
- Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses.
- Taxpayers also cannot claim a deduction for moving expenses (except Armed Forces members on active duty).
- Taxpayers can use the standard mileage rate but generally must use it in the first year the car is used for business purposes. They can choose to use either standard mileage rate or actual expense in later years.
For details and situations where you cannot use the standard mileage rate, visit: IRS Standard Mileage Rates.
Contact a Pinion tax advisor with questions about this deduction and its applicability.
