The Internal Revenue Service has announced the 2019 optional standard mileage rates which are used to compute the deductible costs of operating a vehicle for business, charitable, medical or moving expense purposes.
Beginning on January 1, 2019, the standard mileage rate for use of a car, van, pickup or panel truck is 58 cents per mile driven for business use (up from 54.5 cents in 2018), 20 cents per mile driven for medical or moving purposes (up from 18 cents in 2018), and 14 cents per mile driven in service of charitable organizations.
The announcement also highlights an important change in the law due to the Tax Cuts and Jobs Act: taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, nor can they claim a deduction for moving expenses unless they are a member of the Armed Forces on active duty and moving under orders to a permanent change of station.
As an alternative to using the optional standard mileage rate, taxpayers have the option to calculate the actual costs of operating their vehicle and use the results as their deductible cost.
Regardless of the method you choose, it’s important to maintain adequate records to substantiate the mileage or actual costs of operating the vehicle. Our recommendation is to keep these records for 7 years from the date you file your original return.
Matt Landis is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University Commonwealth School of Law and works regularly with employers and employees.