IRS Sets Mileage Rate at 67 Cents Per Mile for 2024

There are slight changes in the IRS-issued optional standard mileage rates for 2024, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.

Beginning on Jan. 1, 2024, the standard mileage rates for the use of a car, van, pickup truck, or panel trucks will be:

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

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

The IRS reminds taxpayers that under the Tax Cuts and Jobs Act, you 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 always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates, the IRS said.

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, according to the IRS.

Notice 2024-08 contains the optional 2024 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, 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.