The IRS has announced a rise in most 2019 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning Jan. 1, 2019, the rates for the use of a car (or van, pickup, or panel truck) will be as follows:
- 58 cents/mile driven for business use (a 3.5 cent from 2018);
- 20 cents/mile driven for medical or moving purposes (a two-cent increase from 2018; and,
- 14 cents/mile driven in service of charitable organizations (unchanged).
Remember that, under tax reform, you cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, nor can you claim a deduction for moving expenses -- except if you are a member of the Armed Forces on active duty moving under orders to a permanent change of station.
Taxpayers can calculate the actual costs of using their vehicle rather than using the standard mileage rates, but they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after claiming a Sec. 179 deduction for that vehicle. The business standard mileage rate also cannot be used for more than four vehicles used simultaneously.
Contact BGW for further clarification.