With the new year fast approaching, the IRS has been steadily putting out notices this month announcing the kind of changes we can expect for the 2019 tax year. And the latest, detailing the new standard mileage rate and the situations in which the deduction may be used, is no exception.
Front and center, the IRS announced that the new standard mileage rate will be 58 cents per mile for qualifying business use of a car, van, pickup truck, or panel van – an increase from 2018’s 54.5 cents per mile.
However, a few special conditions apply.
For starters, because miscellaneous itemized deductions for unreimbursed employee business expenses are no longer allowed from 2018 through 2025, this also applies to any mileage deductions falling under that category – though certain government employees, members of the armed forces, and performing artists form an exception to the rule. These select few may deduct the standard mileage rate under line 24 of Form 1040, at 58 cents per mile.
The standard mileage rate may also be used as the maximum reimbursement an employer can give an employee when a company vehicle is used, if that employee is unable to prove the actual vehicle expense.
For qualifying cases of transport to and from medical care, and certain moving expenses to and from military stations for members of the armed forces, a standard mileage rate deduction of 20 cents per mile is available – an increase of 2 cents from 2018.
The mileage rate to a charitable organization will continue at 14 cents per mile for 2019, while any business standard mileage rate that is considered depreciation will increase to 26 cents.
Last but not least, as the Tax Cuts and Jobs Act amended all bonus depreciation guidelines, the maximum standard automobile cost for 2019 under a Fixed and Variable Rate plan (FAVR) is now $50,400 for all cars, trucks, and vans.
Want more details? For complete standard mileage rate guidelines and list of qualifying conditions, click here to read Notice 2019-02 in full.