The IRS Unveils Standard Mileage Rates for the Year 2024.
If you’re curious about the disparity IRS in rates for business, medical, and moving purposes, there’s a logical explanation. The standard mileage rate for business is determined through an annual analysis of both fixed and variable costs associated with operating a vehicle. This encompasses factors like depreciation, insurance, repairs, tires, maintenance, gas, and oil. In contrast, the rate for medical and moving purposes is solely based on variable costs.
Now, as for the charitable mileage rate, if it seems constant, that’s accurate. By statutory regulations, it remains unadjusted for inflation or other factors (maintaining a steady 14 cents per mile since the Clinton era).
IRS
The standard mileage rates serve as a basis for calculating deductible expenses for business, moving, medical, or charitable activities. To utilize these rates, multiply them by the number of miles traveled.
In cases where your car serves multiple purposes, maintaining accurate records is essential. You might even use different rates on your tax return. For instance, if you drove 20,000 miles in 2024, with 10,000 for personal use, 2,000 for charitable purposes, and 8,000 for medical reasons, your deduction would be calculated as follows:
10,000 personal miles x 0 = 0
2,000 charitable miles x 0.14 = $280
8,000 medical miles x 0.21 = $1,680
In this scenario, your total deductible mileage-related expenses would be $1,960, plus any associated costs like parking fees and tolls. Report your charitable and medical mileage deductions on the relevant lines on Schedule A. Keep in mind that medical miles are still subject to the 7.5% floor for medical expenses.
While many taxpayers no longer deduct charitable mileage due to not itemizing, the mileage rate remains crucial for charitable organizations as a benchmark for reimbursements. The same applies to business mileage, especially considering the changes in tax reform in 2017, eliminating the deduction for unreimbursed employee travel expenses.
Although most taxpayers can’t claim a deduction for moving expenses, exceptions exist for members of the Armed Forces on active duty moving under orders to a permanent change of station. If the standard mileage rates don’t accurately reflect your costs, you have the option to deduct actual expenses, although it involves more effort.
