January 10, 2018
The Internal Revenue Service announced the 2019 optional standard mileage rates (
Notice 2019-02
) on December 14, 2018. These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Beginning on January 1, 2019, the standard mileage rates for the use of a car, van, pickup truck, or panel truck will be:
- 58 cents per mile driven for business use
- 20 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
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. The business mileage rate increased 3.5 cents for business travel driven and 2 cents for medical and certain moving expense from the rates for 2018. The charitable rate is set by statute and remains unchanged.
Under the Tax Cuts and Jobs Act (TCJA), taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses. Generally, military personnel on active duty moving under orders to a permanent change of station are still allowed to deduct moving expenses. For more details see Notice-2019-02.
Taxpayers have the option of calculating the actual costs of using their vehicle instead of using the standard mileage rates.
Taxpayers may not use the business standard mileage rate for a vehicle after using any depreciation method under the
Modified Accelerated Cost Recovery System (MACRS)
or after claiming a Section
179 deduction
for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. These and other limitations are described in section 4.05 of
Rev. Proc. 2010-51
.
Notice 2019-02
outlines the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for 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.
Feel free to call any member of our team at 610-828-1900 with questions. You can also contact Jackie Himes, CPA, director – tax services at
[email protected]
or me at
[email protected]
. Planning ahead can help you minimize your tax bill and position you for greater success.
Martin C. McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company, PC
Disclaimer:
This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
