Taxes 2024: IRS Increases Mileage Standard Deduction Rates by 1.5 Cents
Written by
Dawn Allcot
Edited by
Maria Concepcion
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The Internal Revenue Service announced an increase in the standard mileage rates when people use their vehicles for business use. The standard mileage deduction rose to 67 cents per mile, up 1.5 cents from 2023. The change will go into effect for the 2024 tax year on taxes filed in 2025.
The change may not sound like a lot, but for people who are on the road for business, the deduction can add up. For instance, truck drivers regularly put in 80,000 to 110,000 miles per year, according to statistics published at FreeFreightSearch.com.
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. If a truck driver puts on 110,000 miles for the year, they can deduct $73,700 rather than $72,050.
Uber drivers, food delivery drivers and other gig workers may also see savings on their tax bill for 2024. According to the website Uberpeople.net, the average full-time Uber driver puts 30,000 to 45,000 on their car per year. For drivers who reach that 45,000-mile mark, they can deduct $30,150 from their income as a business expense.
Should You Take the Standard Deduction?
Business owners, gig workers, and W-2 employees also have the option to deduct actual expenses, instead. These include gas (or EV charging costs), maintenance, repairs, registration, insurance, licenses, and depreciation or lease payments. With the new rate in place for the standard deduction, you might want to calculate your driving expenses both ways and choose the higher number to maximize your deduction.
If you use your car for business and other purposes, you will need to calculate the percentage of use that’s related to business.
Other Driving-Related Tax Deductions
Regardless of whether you take the standard deduction or calculate your actual expenses, you can still deduct parking fees and tolls related to business travel.
If you drive frequently for business, you will want to use an app or keep a notebook in your vehicle to track your mileage and expenses.
Additional Changes to IRS Mileage Rates in 2024
It’s not all good news when it comes to the IRS’ new rules and deduction amounts related to travel. The IRS reduced the standard deduction for miles driven for medical purposes or for moving (applicable only to qualified active-duty members of the Armed Forces) from 22 cents per mile in 2023 to 21 cents per mile in 2024.
The standard deduction for miles driven in service of charitable organizations remains the same for 2024 as in 2023, set at 14 cents per mile.
Final Note
It’s best to speak to a tax accountant or tax advisor if you itemize deductions, run your own business, or receive income as a 1099 contractor. Your tax situation may be more complicated than someone with fewer deductions and a professional can help you minimize your tax liability while avoiding IRS red flags that could lead to an audit.
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