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IRS increases standard mileage rate for 2024

With business laws also evolving, staying up-to-date on changes to certain rules crucial for small to medium-sized business owners and HR professionals. Recent studies show that a significant portion of business expenses goes towards transportation costs, making it essential to stay updated with the latest IRS standard mileage rate changes.

In this article, we will discuss the changes to the IRS standard mileage rate for 2024.  After reading this article, you should feel comfortable on what the IRS standard mileage rate is, its increase from the previous year, what items are included in this rate, and how it impacts your business and tax practices.

What is the IRS standard mileage rate?

The IRS standard mileage rate is a guideline set by the Internal Revenue Service for calculating tax deductions for the use of a vehicle for business, medical, or charitable purposes. This rate is used to simplify expense tracking by assigning a fixed per-mile rate, covering all costs associated with owning and operating a vehicle for these purposes.  The per-mile rate is used as opposed to tallying each travel expense throughout the year – a practice that is tedious and inefficient.

What was the IRS standard mileage rate for 2023?

In 2023, the IRS set the standard mileage rates at 65.5 cents per mile for business use, 22 cents per mile for medical and moving purposes (applicable only to active-duty members of the Armed Forces), and 14 cents per mile for charitable organizations. These rates were carefully determined based on an annual study of the fixed and variable costs of operating a vehicle.

What is the IRS standard mileage rate for 2024?

On December 14th, the IRS announced an increase in the standard mileage rate. The new rates for 2024 are as follows:

  • Business Use: 67 cents per mile, an increase from the 65.5 cents in 2023.
  • Medical and Moving: 21 cents per mile, slightly decreased from 22 cents in 2023, applicable exclusively to active-duty members of the Armed Forces.
  • Charitable Organizations: 14 cents per mile, remaining unchanged.

What is included in the mileage rate?

The IRS standard mileage rate is designed to simplify the process of accounting for vehicle expenses for business, medical, moving, or charitable purposes. Here’s what it encompasses:

  1. Fuel Costs: A significant component of the rate, it covers the money spent on gas or diesel.
  2. Maintenance and Repairs: Regular wear and tear, oil changes, tire rotations, and other routine maintenance are included.
  3. Insurance: The rate factors in a portion of the auto insurance cost.
  4. Depreciation: A calculated amount for the loss in value of your vehicle over time is included.
  5. Registration and Taxes: The rate includes an average of vehicle registration fees and personal property taxes.

What the IRS mileage rate does not include

While the standard mileage rate is comprehensive, there are expenses it does not cover:

  1. Parking Fees and Tolls: These costs are not included in the standard rate and must be accounted for separately.
  2. Fines and Violations: Any fines or tickets incurred during business use are not covered.
  3. Interest on a Car Loan: The interest paid on a vehicle loan is not included in the mileage rate.
  4. Lease Payments: For those who lease vehicles, the standard rate does not cover the lease payments.
  5. Personal Use: Any expenses incurred during personal use of the vehicle are excluded.

Who can use the standard mileage rate?

The standard mileage rate can be used by:

  • Self-employed individuals and independent contractors for business-related driving.
  • Employees when using their personal vehicles for business purposes, subject to their employer’s reimbursement policy.
  • Active-duty members of the Armed Forces for moving under orders.
  • Individuals driving for medical purposes or in service of charitable organizations.

How does this impact my taxes?

For business owners and HR professionals, understanding the tax implications of these changes is important.

  • Self-employed individuals can deduct the standard mileage rate for business miles driven from their taxable income.
  • Employers reimbursing employees at or below the standard rate will not have the expense reimbursements taxed as income. However, reimbursements above the standard rate will be taxable.
  • Employees should note that unreimbursed business mileage is no longer deductible under the Tax Cuts and Jobs Act, except for certain groups like Armed Forces reserves and fee-based state or local government officials.
  • For all taxpayers, it’s important to maintain accurate records of mileage to substantiate deductions and reimbursements.


The increase in the IRS Mileage Rate for 2024 reflects the increasing costs of operating a vehicle. For employers and HR professionals, staying informed and adapting to these changes is key for compliance. By understanding and applying these rates appropriately, businesses can ensure they are maximizing their deductions and reimbursements.

For further information and detailed guidelines, consult the IRS Notice 2024-08 or reach out to a tax professional. Feel free to reach out to our team here with any questions or needs you have.