The IRS issued the 2024 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. As of Jan. 1, 2024, the rates when using a car, van, pickup or panel truck are as follows:

• Business use: 67 cents per mile, representing a 1.5-cent increase from 2023.
• Medical or moving purposes for qualified active-duty members of the Armed Forces: 21 cents per mile, a decrease of 1 cent from 2023.
• Service of charitable organizations: 14 cents per mile, remaining unchanged from 2023 as set by statute.

These rates are applicable to electric and hybrid-electric vehicles, as well as gasoline and diesel-powered ones. The standard mileage rate for business use is determined through an annual analysis of fixed and variable operating costs, while the rate for medical and moving purposes is based on variable costs.

Please remember 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, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station.

Taxpayers have the flexibility to choose between using these standard rates or calculating the actual costs of vehicle usage. If the standard mileage rate is chosen, it must be applied in the first year the vehicle is used for business purposes. Subsequently, taxpayers can decide whether to continue using the standard rate or switch to actual expenses. For leased vehicles, if the standard rate is chosen, it must be used for the entire lease duration, including renewals.

If you have questions about the deductibility of your vehicle’s mileage in 2024, Doeren Mayhew’s business tax pros are here to show you the way.