IRS Issues Standard Mileage Rates for 2024

The IRS recently announced the 2024 optional standard mileage rates for calculating deductible costs when operating a vehicle for business, charitable, medical, or moving purposes. Applicable to a variety of vehicles, including electric and hybrid-electric, as well as those powered by gasoline and diesel, the following rates take effect January 1, 2024:

• 67 cents per mile for business use, marking an increase of 1.5 cents from 2023.
• 21 cents per mile for medical purposes or relocation for qualified active-duty members of the armed forces, showing a decrease of 1 cent from 2023.
• 14 cents per mile for service to charitable organizations, a rate statutorily set and unchanged from 2023.

Notably, under the Tax Cuts and Jobs Act, most taxpayers cannot claim miscellaneous itemized deductions for unreimbursed employee travel expenses. Additionally, deductions for moving expenses are limited to active-duty Armed Forces members moving under official orders.

Taxpayers can utilize the standard mileage rate for their vehicle expenses should they choose. However, this choice should generally be made in the first year the car is used for business purposes. Once this initial decision is made, in subsequent years, taxpayers have the option to choose between the standard mileage rate and the method of calculating actual expenses. For those who lease their vehicles, if the standard mileage rate is selected, it must be consistently used throughout the entire lease term, including any extension or renewal periods.

For more detailed information, please refer to IRS Notice 2024-08, which contains the 2024 standard mileage rates and data on the maximum automobile costs for various tax purposes. If questions arise about how these changes may impact your tax situation or if you need assistance deciding the most beneficial approach for your vehicle expenses, contact your CRI advisor. We're here to assist you at every step, ensuring you make the most informed financial decisions.