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2024 Standard Mileage Rates

2024 Standard Mileage Rates

The Internal Revenue Service (IRS) has issued the optional 2024 standard mileage rates that are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Effective January 1, 2024, the rates for using a car, van, pickup or panel truck will be:

  • 67 cents per mile driven for business use (1.5 cent increase from 2023).
  • 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces (1 cent decrease from 2023).
  • 14 cents per mile driven in service of charitable organizations (this rate is set by statute and remains unchanged from 2023).

The standard mileage rate for business use is based on an annual study of fixed and variable costs of operating an automobile. These rates also apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles. The rate for medical and moving purposes is based on variable costs.

Taxpayers can use the standard mileage rate but generally must opt to use it in the first year the car is available for business use. Then, in later years, they can choose 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.

Taxpayers always have the option to calculate the actual costs of using their vehicle rather than using the standard mileage rates. It is important to remember that taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses under the Tax Cuts and Jobs Act.

Notice 2024-08 outlines the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. Also, the Notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2024 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

Please contact your Brown Plus advisor if you have any questions regarding mileage reimbursement rates.

Posted In: Tax | Insights

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