On December 14, 2023, the Internal Revenue Service (IRS) announced an increase in the optional standard mileage rate for tax year 2024. The new 67 cents per mile rate is up from the previous year's 65.5 cents per mile, reflecting the rising costs of operating a vehicle for business purposes.

Updated Rates

Beginning January 1, 2024, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be as follows:

• 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 from 2023.
• 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2023.

These new rates apply to electric, hybrid-electric, gasoline, and diesel-powered vehicles.

What is The Optional Standard Mileage Rate?

The optional standard mileage rate simplifies calculating deductible costs for using a car for business purposes. Instead of keeping track of actual expenses, this rate considers fixed and variable costs like fuel, depreciation, and insurance. The federal government and businesses widely use it as a standard for reimbursing employees for mileage.

More Details on the 2023 & 2024 Mileage Rates

Taxpayers can always calculate the actual costs of using their vehicle instead of using the standard mileage rates. Taxpayers should use the rates outlined in Notice 2024-08 for travel from January 1 – December 31, 2024, and Notice 2023-03 for January 1 – December 31, 2023.