Tax Central Alert: Standard mileage rates changing for 2019

December 14, 2018

Beginning January 1, 2019, the standard mileage rates for the use of a car (including vans, pickups and panel trucks) will be:

  • 58 cents per mile for business miles driven (2018 rate was 54.5 cents per mile);
  • 20 cents per mile for medical or moving purposes (2018 rate was 18 cents per mile); and
  • 14 cents per mile driven in service to a charitable organization (same rate as 2018).

An employer that requires employees to supply their own autos may reimburse them at a rate that doesn't exceed 58 cents per mile for employment-connected business mileage during 2019. The reimbursement will be treated as a tax-free reimbursement under an accountable plan if the employee substantiates the time, place, business purpose, and mileage of each trip.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station. Employer reimbursed moving expenses are taxable income to the employee.

The standard mileage rates for business, medical, and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile. The charitable mileage rate is set by law.

Tags: Payroll, Tax