2024 IRS Mileage Reimbursement Rate: A 1.5 Cent Increase Overview

Updated on February 19, 2024

It’s important for business owners and independent contractors to stay updated on the IRS mileage rate deduction, as it can significantly impact their tax deductions related to business travel. In 2024, the IRS has set the mileage rate at its highest point ever, reaching 67 cents per mile (CPM). This is an increase of 1.5 cents from the rate in 2023, which was 65.5 CPM.

For those who use their vehicles for business purposes, the mileage rate deduction is a valuable tool for calculating the deductible expenses associated with business-related travel. Business owners and independent contractors should refer to the IRS Mileage Reimbursement Rate for 2024 to accurately determine the deductible amount for driving exclusively for business.

It’s worth noting that the 2024 mileage rate represents the fourth consecutive increase in the past three years. Staying informed about these changes and adapting your business practices accordingly can help maximize your tax deductions and manage the costs associated with daily job-related travel. Visit the IRS website or check official sources for the most up-to-date information on mileage rates and other tax-related matters.

2024 IRS Mileage Rate Update

The latest update on the IRS Standard Mileage Rate for 2024 shows a 1.5 cent increase to 67 cents per mile from the 2023 rate. It’s essential to note that the charitable mileage rate remains constant at $0.14 per mile, while the rate for relocation and medical expenses has decreased by 1 cent to $0.21 per mile. These rates are distinct from the business mileage rate.

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These standardized rates are mainly designed to help businesses and individuals calculate the tax-related value of using a vehicle. In simpler terms, they serve as tools for tax deductions. However, many businesses commonly use the business rate as their standard method for reimbursing employees.

2024 IRS Mileage Rate Overview

Post Title IRS Mileage Reimbursement Rate 2024
Country USA
Purpose Tax help for vehicles
New Rates 67 CPM
Category Finance News
New Rates Applicable Date January 1, 2024
Official Website irs.gov

 

Understanding the Standard Mileage Rate

The IRS sets a default CPM, known as the standard mileage rate, for taxpayers claiming deductions for their business, charity, or medical-related vehicle usage. These rates, also called mileage per diem or deductible mileage, are adjusted annually by the IRS and depend on the purpose of vehicle use. Due to increased fuel prices in 2022, there was a mid-year adjustment.

For the 2023 tax year, the standard mileage rate for business use is 65.5 CPM, while it has increased to 67 CPM for the 2024 tax year.

2024 Business Standard Mileage Rate: 67 Cents

The IRS has released the 2024 Optional Standard Mileage Rate (SMR), now set at 67 cents per business mile. This marks a 1.5 cent increase from the 2023 rate of 65.5 CPM. The new rate applies to all conventional vehicles—electric, hybrid, gasoline, or diesel. Additionally, the IRS has decreased the standard mileage rate for medical and moving miles to 21 CPM, down by 1 cent from 2023. The charity mileage rate remains unchanged at 14 CPM through 2024, as established by Congress. The IRS SMR adjustments reflect the ongoing challenges in the U.S., such as high car ownership costs, international conflicts, labor shortages, and supply chain issues. For more details, refer to the official announcement on this page.

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2024 IRS Mileage Rates

Understanding the IRS standard mileage rate is crucial for those overseeing work-related drivers or driving for work themselves. For self-employed individuals like gig workers and rideshare drivers, being able to deduct car expenses on taxes can lead to substantial savings. The IRS mileage rate for 2024 plays a vital role in setting reimbursement rates for both companies and workers.

Federal mileage rates 2024 2023
Business use (cars, vans, pickups, panel trucks) 67 CPM 65.5 CPM
Medical and moving (Armed Forces active-duty only) 21 CPM 22 CPM
Charity 14 CPM 14 CPM

 

Business Standard Mileage Rate by IRS

If you’re self-employed or a contractor, you might qualify for deducting your car expenses related to work-related travel. The tax deduction varies depending on how you use your car. Typically, miles associated with business travel, like trips to clients, meetings, or temporary workspaces, can be deducted.

Nevertheless, there are exceptions to this rule. You have the flexibility to choose between deducting actual expenses (such as parking fees, maintenance, depreciation, fuel, etc.) or using the standard mileage rates mentioned above. It’s important to note that you cannot deduct both.

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