IRS Issues Standard 2019 Mileage Rates

The Internal Revenue Service (IRS) has recently issued the standard mileage rates for 2019. These new rates apply as of January 1, 2019 for the use of any car, van, pickup or panel truck. The rates are as follows:

• 58 cents per mile driven for business use, which is up from 54.5 cents per mile in 2018.
• 20 cents per mile for medical or moving purposes, which is up from 18 cents in 2018.
• 14 cents per mile driven in service of charitable organizations (this number is not changed from last year and it is currently fixed by Congress).

Why is there a different rate for business and medical/moving purposes?

The rate differs between business usage and medical or moving purposes. The standard mileage rate for business is calculated based on an annual study of fixed and variable costs associated with operating an automobile, including insurance, maintenance, depreciation, repairs, tires, oil and gas. The rate for medical and moving purposes is only based on variable costs, such as oil and gas.

The raise for 2019 is larger than that of which the IRS gave in 2018 for business and medical/moving mileage. The charitable rate has not changed over the past 20 years.

The IRS also reminds taxpayers that taxpayers can’t claim a miscellaneous itemized deduction for employee travel expenses that are unreimbursed, as per the Tax Cuts and Jobs Act. Taxpayers are also unable to claim deductions for moving expenses, unless they are members of the Armed forces on active duty who are moving under orders.

Taxpayers are still able to choose the option of calculating actual costs rather than the standard mileage rates. Keep in mind that taxpayers are not able to use the business standard mileage rate for vehicles after using a depreciation method, as per the Modified Accelerated Cost Recovery System (MACRS).