IRS Issues 2019 Mileage Rates
The Internal Revenue Service published the 2019 mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
New Year, New Mileage Rates
Starting January 1, 2019, the standard mileage rates for the use of a car, including vans, pickups or panel trucks will be:
- 58 cents per mile driven for business use, up 3.5 cents from the rate for 2018,
- 20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018, and
- 14 cents per mile driven in service of charitable organizations.
How does the Standard Mileage Rate increase affect taxpayers?
From 2018 that is an increase of 3.5 cents for business travel purposes. For medical and specific moving expenses, that is an increase of 2 cents per mile from 2018. However, the statute that drives the charible rate did not change.
How does the Tax Cuts and Jobs Act affect non-reimbursable travel expenses?
Please note that under the Tax Cuts and Jobs Act, regarding non-reimbursable employee travel expenses, taxpayers cannot claim nor itemize a miscellaneous deduction. Also, taxpayers may not claim a deduction for moving expenses. The only exception are for active duty members of the military who must move due to orders to a permanent change of station. More details may be seen by reading the IRS Notice-2019-02.
What is the basis for the 2019 Mileage Rate?
The basis for the standard mileage rate for business use is taken from an annual study of the fixed and variable costs of operating an automobile. The basis for medical and moving rates is only variable costs.
Use of Vehicle Calculation Option
Taxpayers always have the option to calculate the use of vehicle actual costs instead of using the mileage rates. However, consistency is key year-over-year.
According to the IRS Modified Accelerated Costs Recovery system (MACRS), a taxpayer cannot use the business standard mileage rate for a vehicle after using any depreciation method. The other exception here is a taxpayer cannot use business standard mileage rate after claiming a Section 179 deduction for that vehicle. In addition, the taxpayer cannot use the business standard mileage rate for more than four vehicles in use simultaneously. For those who like reading this stuff, Section 4.05 of Rev. Proc. 2010-51 posts these and other limitations.
Fixed and Variable Rate Plans for 2019 Mileage Rates
So, a taxpayer may calculate the allowance under a fixed and variable rate plans for the following:
- depreciation taken under the business standard mileage rate, and
- the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
This information is all according to the IRS.gov’s Notice 2019-02.
Questions About the 2019 Standard Mileage Rates?
Do you have questions regarding the 2019 Mileage Rates for your business, charitable work or medical mileage? You may call my office and ask for me, Alex Franch, BS EA at 781.849.7200 or email the office at email@example.com to secure help with your small business accounting needs. Also, you may book an appointment online here and you can meet with any of our tax experts. We are available by appointment at our three convenient locations in Norwell, South Weymouth and Dedham, Massachusetts.
Alex Franch, BS EA
Alex is a Tax Specialist and Partner at Joseph Cahill & Associates / WorthTax. He has a diverse background including a Bachelor of Science from Boston College in Mathematics and extensive military service. Alex is an Enrolled Agent and has a decade of tax preparation experience. He is passionate about serving businesses with tax and financial planning strategies. Mr. Franch is licensed by the Financial Industry Regulatory Authority (FINRA). He holds a Series 6, 63, 65, and 7, and by the Commonwealth of Massachusetts Division of Insurance. Alex Franch is a registered representative of, and offers securities and investment advisory services through, Commonwealth Financial Network. He is a registered broker-dealer, Member FINRA/SIPC.
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