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On Dec. 29, the agency announced a bump in the optional standard mileage rate starting Jan. 1, 2023 — which will now be 65.5 cents per mile driven. Taxpayers can use the new rate to calculate ...
The business mileage reimbursement rate is an optional standard mileage rate used in the United States for purposes of computing the allowable business deduction, for Federal income tax purposes under the Internal Revenue Code, at 26 U.S.C. § 162, for the business use of a vehicle. Under the law, the taxpayer for each year is generally ...
The IRS bumped up the optional mileage rate to 67 cents a mile in 2024 for business use, up from 65.5 cents for 2023. The new rate kicks in beginning Jan. 1 and it would apply to 2024 tax returns ...
For drivers on the low-end of that range, they could deduct $53,600 in mileage for 2024, versus $52,400 in 2023, decreasing their tax liability and potentially putting money in their pocket.
An employer in the United States may provide transportation benefits to their employees that are tax free up to a certain limit. Under the U.S. Internal Revenue Code section 132(a), the qualified transportation benefits are one of the eight types of statutory employee benefits (also known as fringe benefits) that are excluded from gross income in calculating federal income tax.
The IRS "tax deduction" rate is not necessarily the same as an "employee reimbursement" rate. Computing an "employee reimbursement" is not even the primary purpose of the IRS rate. Also, for purposes of U.S. federal income tax deductions, there are other IRS mileage rates besides the "business" rate.
In December 2023, the IRS announced the standard mileage rates for 2024. While business rates have increased, other rates have either decreased or remained unchanged from the year before.
Ramp takes a closer look at mileage reimbursement and explains why it's important and when it does or does not make sense.