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Optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes are going up for next year, according to the Internal Revenue Service — and they apply to electric and hybrid-electric automobiles as well as to gasoline and diesel-powered vehicles.
The IRS said that beginning Jan. 1, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
- 67 cents per mile driven for business use, up 1.5 cents from 2023;
- 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, a decrease of 1 cent; and,
- 14 cents per mile driven in service of charitable organizations (this rate is set by statute and remains unchanged from 2023).
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. Taxpayers can also calculate the actual costs of using their vehicle rather than using the standard mileage rates.
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. 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.
Also, under the Tax Cuts and Jobs Act, taxpayers can’t claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, nor can they claim a deduction for moving expenses unless they’re active-duty members of the U.S. Armed Forces moving under orders to a permanent change of station.
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