IRS Increases Business Standard Mileage Rate to 67 Cents Per Mile Effective Jan. 1, 2024

Posted by: Karen Booher on January 1st, 2024

On December 14, 2023, the IRS announced that the 2024 business standard mileage rate will increase by 1.5 cents per mile – from 65.5 cents per mile to 67 cents per mile, beginning January 1, 2024.

The boost in the standard mileage rate comes despite a recent decrease in fuel prices. Other factors, however, have contributed to an increase in the overall cost of vehicle ownership – vehicle acquisition costs have risen slightly, and vehicle depreciation has accelerated.

The IRS also announced other standard mileage rates for 2024 to be:

• 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.
• 14 cents per mile driven in service of charitable organizations. This rate is set by statute and remains unchanged from 2023.

The above rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

What is the Standard Mileage Rate?

The standard mileage rate is used to compute the costs that are deductible by businesses and self-employed individuals for operating an automobile for business use, as an alternative to tracking actual costs. Employers are not required by law to, but often use the standard mileage rate to pay tax-free reimbursements to employees who use their own vehicles for business.

Source:

SHRM.org, “IRS Boosts Mileage Rate for 2024”, by Kathryn Mayer, December 14, 2023.