In 2019, the standard mileage rates for driving a car, van, pickup, or panel truck were as follows:
- For business miles driven, the rate is 58 cents per mile (up from 54.5 cents in 2018)
- 20 cents per mile traveled for medical or relocation reasons (up from 18 cents in 2018)
- 14 cents per mile traveled in support of charity causes (currently fixed by Congress)
There is a rationale for the difference in rates for business and medical or moving purposes: the standard mileage rate for business is computed using an annual analysis of the constant and variable expenses of operating a car, including depreciation, insurance, repairs, tires, maintenance, and so on.
How to calculate the Standard Mileage Rate
The amount of a deductible business, relocation, medical, or charity cost is calculated using standard mileage rates (miles driven times the applicable rate). Simply multiply the usual mileage rates by the miles driven to utilize the rates.
If you use your automobile for more than one purpose, you should keep detailed records and deduct the expense of personal trips. You can also utilize several rates on your tax return.
For example, suppose you drove 25,000 miles in 2019. 7,000 miles are for personal use, 9,000 miles are for business use, 4,000 are for charity reasons, and 5,000 are for medical needs.
Your deduction would be calculated as follows:
- 7,000 personal miles x 0 = $0 (not deductible)
- 9,000 business miles x .58 = $5,220
- 4,000 charitable miles x .14 = $560
- 5,000 medical miles x .20 = $1,000
In this case, your total deductible mileage-related expenditures would be $6,780, plus any additional fees or tolls.
Taxpayers can also deduct real expenditures rather than using the normal mileage rates, albeit this is a lot more work.
Mileage reimbursement after the Tax Cuts and Jobs Act (TCJA)
Remember that under tax reform, taxpayers may no longer claim an unreimbursed employee travel expenditure as a miscellaneous itemized deduction. This deduction, along with others like the home office deduction, was removed from Schedule A. This has no bearing on any self-employment, freelancer, or independent contractor deductions legitimately reported on a Schedule C.
In 2019, most taxpayers will be unable to deduct relocation expenditures. An exception is made for personnel of the Armed Forces on active service who are ordered to a permanent change of station.
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