Do you drive to work day in and day out? Maybe you are one of the luckily ones and you get to work from home and rarely go into the office. Perhaps you meet your boss once a week at the corporate headquarters? Did you move across the country in 2018 and you’re wondering if you can write off the traveling expenses? If any of these apply, you’ll want to learn more about the 2019 optional standard mileage rates for when you file your 2018 income tax returns.
Yes, it’s that time of year and to help you understand better the Internal Revenue Service recently issued the 2019 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
What does this mean for you? Keep reading.
Beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (as well as vans, pickups or panel trucks) will be, according to the IRS:
- 58 cents per mile driven for business use, up 3.5 cents from the rate for 2018,
- 20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018, and
- 14 cents per mile driven in service of charitable organizations.
Increased rate for taxpayers
The good thing about this is that 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, according to the IRS website.
It is also important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And that’s not all. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Notice-2019-02.
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 always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates, the IRS notes.
The IRS also states that a taxpayer 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, posted recently on IRS.gov, contains 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.
If you are self-employed or have other fourth-quarter income that requires you to pay quarterly estimated taxes, get them postmarked by Jan. 15, 2019 tax deadline. If you haven’t applied for an extension, e-file or postmark your individual tax returns by midnight April 15, 2019.
Visit IRS.gov for more tax information.