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This guide explains the basics of mileage reimbursement and how to devise a policy that reimburses your employees fairly and efficiently. What is mileage reimbursement?
Standard mileage rate. For 2023, the standard mileage rate for the cost of operating your car for business use is 65.5 cents ($0.655) per mile. Car expenses and use of the standard mileage rate are explained in chapter 4. Depreciation limits on cars, trucks, and vans.
The business mileage rate for 2024 is 67 cents per mile. You may use this rate to reimburse an employee for business use of a personal vehicle, and under certain conditions, you may use the rate under the cents-per-mile rule to value the personal use of a vehicle you provide to an employee.
Learn the ins and outs of employee mileage reimbursement, IRS tax deduction rates, and how an organization can adopt its own mileage policies.
Beginning on Jan. 1, 2024, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 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.
No federal law requires you to reimburse your employees for using their personal vehicles for work, but some state laws do. How is mileage reimbursement calculated? The IRS sets a standard mileage reimbursement rate of 58.5 cents per business mile driven in 2022.
For 2024, the IRS' standard mileage rates are $0.67 per mile for business, $0.21 per mile for medical or moving, and $0.14 per mile for charity.
Learn about mileage reimbursement in the US: rates, rules, IRS deductions for employees, self-employed, and employers. Ensure compliance with our guide.
For reimbursements to be tax-free, companies need to use standard mileage rates provided by the IRS. In 2024, it means that companies can issue tax-free reimbursements at the maximum rate of 67 cents per mile. Any vehicle reimbursement higher than that is considered taxable income.
Learn more about the differences between the IRS standard mileage rate reimbursement, the FAVR method and mileage allowance and when your reimbursement may be taxed. In order to be reimbursed for your business driving, you will need to provide your employer with consistent records of your mileage.