Standard Mileage Rates – Increase Announcement

The IRS has released the standard mileage rates for the new year.  Effective January 1, 2024, the standard mileage rate for business driving increased to 67 cents per mile, the rate for medical driving decreased to 21 cents per mile, and the rate for charitable driving remained 14 cents per mile.

Business Driving

In general, there are two options for deducting business driving expenses: Actual Expenses and Standard Mileage.  Actual expenses must be attributable to business use, and include gas, oil, tires, insurance, repairs, licenses, and vehicle registration fees.  A depreciation allowance for the vehicle may also be claimed based on your percentage of business use.  Depending on the type of vehicle, however, depreciation may be subject to so-called “luxury auto” limits.

Keeping track of your vehicle-related expenses can be time-consuming.  Alternatively, you may be able to use a cents-per-mile rate.  With the standard mileage rate deduction, you don’t have to account for your actual expenses, although you still must record certain information such as the miles driven for each business trip, the dates you drove, and the business purpose of your travel.  The standard mileage deduction is simply the number of business miles multiplied by the standard mileage rate (67 cents per mile for 2024).

Also, there are additional rules that may prevent you from using the actual expenses method or the standard mileage rate method.  For example, leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) when the standard mileage rate is chosen in the first year.

Medical, Charitable, and Moving-Expense Mileage

In addition to business driving, you can use a standard mileage rate for medical driving if you deduct medical expenses on your tax return.  For example, you can include in medical expenses the cost of driving to doctors’ appointments. The 2024 medical mileage rate is 21 cents per mile.

The mileage rate for charitable driving – which hasn’t been adjusted by Congress since 1998 – remains unchanged at 14 cents per mile for the entire year.  Additionally, the rate for moving-expense driving (currently only available to active-duty members of the military) is now 21 cents per mile.

What’s the right option for you?

From a tax standpoint, you may be better off deducting actual expenses over standard mileage; however, tracking actual expenses can also be tedious.  If you want a simpler solution, just use the standard mileage method.  If you have questions regarding which method is best for your situation, please let us know.

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