The IRS has issued the 2019 optional standard mileage rate, with a significant increase for the new year. The optional standard mileage rate is used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Beginning January 1, 2019, the standard mileage rates* for the use of a car (also vans, pickups, or panel trucks) will be:
• 58 cents per mile driven for business use, up 3.5 cents from the rate for 2018—this is the highest rate in over 10 years (58.5 cents in July-Dec. 2008)
• 20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018
• 14 cents per mile driven in service of charitable organizations
California employers are required by law to provide reimbursement for all expenses necessarily spent in the discharge of their job duties. In general, the Labor Commissioner has stated that the IRS mileage rate will be viewed as a reasonable measure of business-related vehicle expenses.
Yet, this rate is not conclusive. If an employee can show that actual expenses are more than the standard mileage rate, the employer will need to pay the difference between the two.
*The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
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