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IRS Mileage Rates 2024
January 2, 2024 - 2 min read

IRS Mileage Rates 2024

The IRS issues 2024 mileage rates

The IRS has announced the standard mileage rate for 2024: 67 cents per mile, up 1.5 cents from 65.5 cents in 2023. Issued in Notice 2024-8, on Dec. 14, 2023, it covers the business use of a vehicle (cars, vans, pickups, and panel trucks) and will come into effect Jan. 1, 2024.

Rates for medical, moving and driving in the service of charitable organizations were also announced:

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

 

Further notes on the rates and who can use them:

  • The standard mileage rates cover vehicles that run on electricity, hybrid vehicles as well as diesel and gas vehicles.
  • To use the rate for moving, active-duty members of the Armed Forces must be moving under orders to a permanent change of station.
  • You can still deduct your expenses while driving for business if you use other types of vehicles (including motorcycles and boats), but you have to use the actual expenses method.
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How you can use the mileage rate for business

The mileage rate for business is the rate at which you can get reimbursed for your driving for business purposes using your own car without having the reimbursement included in your income. Any higher than the standard mileage rate and your reimbursement is considered income and is subject to tax.

If you are self-employed (1099), you can take a tax write-off without needing to be reimbursed. You can either use the mileage rate or the actual costs method.

If you are a W-2 employee, since the Tax Cuts and Jobs Act in 2017, your employer can elect to reimburse you for driving for business, but you cannot take a direct tax write-off. This is in effect until January 1st, 2026.

There are a few exceptions to the requirement for reimbursement: Reserves of the Armed Forces, state and local government officials paid on a fee basis can still use the standard business mileage rate and deduct unreimbursed travel expenses (including driving their own car for business). Keep in mind that this is an adjustment to total income on line 12 of Schedule 1 of Form 1040.

As an employer, the standard mileage rate represents the highest rate at which you can reimburse your employees without them being taxed.

If you have further questions on any of the above, we should be able to answer them in our more comprehensive guide on mileage reimbursement and deductions in the US.

How are the federal mileage rates set?

The IRS sets and adjusts the rates based on the costs of owning and operating a car. They follow both fixed and variable costs and sometimes even adjust rates mid-year as well as at each calendar year. The rate for business is set based on both fixed and variable costs, while the rates for medical and moving are set only based on variable costs.

Fixed costs taken into account, among others, include insurance, license and registration fees, and taxes. 

Variable costs taken into account, among others, include gas, parking, oil change, tire change, and new batteries.

The rate for charity is set by statute and has not changed since 1998.

For further reading, see the IRS Notice 2024-08, published Dec. 14th, 2023.

FAQ

Business mileage reimbursement is only taxed if you are paid more than you would with the standard business mileage rate.
The rates for medical and moving are based on variable costs, of which a big part is gasoline prices. The prices of most types of petrol have dropped dramatically since 2022. In June 2022 a gallon of gasoline cost a bit more than $5, while the average during 2023 has been closer to $3.5.
If you drive your personal motorcycle for business, you cannot use the standard mileage rate and you have to use the actual costs method instead.

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