Tax Tip #176
Standard Mileage Rates for 2024
As of January 1, the standard mileage rates for the use of cars, vans, pickups or panel trucks is now:
- 67 cents per mile driven for business use, up 1.5 cents from the rate for 2023;
- 21 cents per mile driven for medical, down 1 cent from the rate for 2023; and
- 14 cents per mile driven in service of charitable organizations; unchanged from 2023.
What does this mean for tax savings? Example: A taxpayer who drives 10K miles in 2023 and is in the 24 percent federal tax bracket. Tax savings is approximately $1,608 (10K x .67 x .24).
It is important to note that 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, the exception being only for members of the Armed Forces.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. In subsequent years, they can choose to use either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.
Additionally, taxpayers who are not employees and incur overnight travel may be eligible for the IRS per diem rates deduction.
If you have any questions or would like assistance, feel free to reach out to a team member.
