IRS Mileage Rate 2024

Everything You Need to Know About IRS Mileage Rates in 2024 and Beyond

The IRS standard mileage rate, sometimes referred to as the federal mileage rate or mileage reimbursement rate, is an essential factor for anyone who drives for work or manages people who do. If you’re self-employed, deducting vehicle expenses from your taxes can add up fast, especially for gig workers and rideshare drivers. For employees and their employers, the IRS mileage rate is an important benchmark for setting reimbursement rates.

How does the IRS determine mileage rates each year, and what is the rate for 2024? This guide explains everything you need to know about past, present, and future IRS mileage rates. We'll cover:

  • What is the IRS mileage rate for 2024?
  • How does the IRS determine mileage rates every year?
  • Federal mileage rates over the past decade
  • Key factors that influence IRS mileage rate changes
  • How to use the standard mileage rate

What is the current IRS mileage rate?

If you're a business owner or self-employed individual who uses a vehicle for work purposes, you'll want to stay updated on the IRS mileage rate for 2024. This rate is used to calculate the deductible costs of operating a vehicle for business, charitable, medical, or moving purposes.

The IRS has announced the standard mileage rates for the use of a car, van, pickup, or panel truck for the year 2024. Here are the rates:

  • 67 cents per mile for business purposes
  • 21 cents per mile for medical purposes
  • 14 cents per mile for charitable purposes

The federal mileage rate for medical use is typically slightly lower than for business use because it takes fewer costs into account. Variable costs, such as gas, are included in the calculation, but not fixed costs that don’t change much based on how many miles you drive, like insurance.

The federal mileage rate for charitable use is set by statute. Currently set at 14 cents per mile, it has not changed in many years.

Calculating deductions

It's important to understand how to calculate your deductions using the IRS mileage rate for 2024. To do this, simply multiply the number of business miles driven by the standard mileage rate for business use. For medical or moving purposes, multiply the number of qualifying miles by the applicable rate. And for charitable use, the deduction is based on the charitable mileage rate.

Remember to keep detailed records of your mileage and the purpose of each trip to support your deduction claims in case of an IRS audit. We'll cover more on that below.

How does the IRS determine mileage rates each year?

The IRS publishes the federal standard mileage rate each calendar year. This sets the per-mile rate for operating vehicles for business, medical, or charitable purposes. 

The rate for business represents an estimate of the per-mile costs of using your car, based on nationwide averages in the previous year. To set the business rate, the IRS analyzes these primary data sources:

  • Transportation cost inflation metrics and overall consumer spending on vehicles
  • National average gas prices from the previous year
  • Vehicle insurance premium trends and pricing data
  • Maintenance and tire costs benchmarked across industry data
  • Broader transportation industry analyses assessing vehicle ownership costs

In particular, gas prices are heavily weighted in the yearly calculation since fuel is a major cost factor directly tied to mileage. The IRS synthesizes these data points to determine a reasonable standard per-mile rate. This rate is also known sometimes as the federal mileage reimbursement rate

Federal mileage rate history over the past decade

Looking back over the last decade of IRS standard mileage rates provides helpful context on what drivers can expect in 2024 based on inflation, fuel prices, and other cost factors:

IRS mileage rates 2014-2024

2014 - 56 cents per mile
2015 - 57.5 cents per mile
2016 - 54 cents per mile
2017 - 53.5 cents per mile
2018 - 54.5 cents per mile
2019 - 58 cents per mile
2020 - 57.5 cents per mile
2021 - 56 cents per mile
2022* - 58.5 cents/62.5 cents per mile
2023 - 65.5 cents per mile
2024 - 67 cents per mile

*In 2022, the IRS mileage rate was raised from 58.5 cents to 62.5 cents for the second half of the year, to combat rising costs.

Rates trended lower between 2016 and 2018 due to low national gas prices and modest inflation. However, in recent years, the rate has gone up due to a reverse in those same factors. Higher rates better reflect the true costs that drivers are incurring for business transportation when gas and overall consumer prices are elevated.

Related: IRS Mileage Rate History | Everlance

Key factors that influence IRS mileage rate changes

Though based on thorough data analysis, IRS mileage rates are inherently estimates. Many variables influence transportation costs annually. Key factors that can impact rate changes include:

  • Gas Prices - As the major cost is tied directly to mileage, fuel price fluctuations significantly sway annual rates. Unexpected gas price spikes or plunges alter projections.
  • Vehicle Maintenance - Rises in parts, labor, and tire costs lead to rate increases to cover the gap. Improvements become headwinds.
  • Insurance Premiums - Vehicle and commercial rideshare insurance pricing trends factor into the mileage deduction.
  • Inflation - High transportation cost inflation boosts rates. Low inflation contributes to a slower rate of growth.
  • Used Car Prices - Stronger used prices lead to higher depreciation costs factored in. Weaker prices have the opposite effect.
  • Tax Policy - Tax code changes around business mileage could influence yearly rate decisions.
  • Industry Factors - Wider economic or industry issues affecting personal transportation costs impact the annual analysis.

The IRS considers these variables when setting each year's mileage deduction rate. For 2024, inflation and gas prices had the biggest influence, barring wider economic impacts.

How to use the standard mileage rate

The 2024 mileage rate will apply to all driving starting January 1, 2024. It will be the rate at which self-employed folks can deduct business mileage from their 2024 taxes and the rate up to which companies can reimburse employees tax-free.

Regardless of small annual fluctuations, the IRS mileage rate remains significant, especially for people who drive a lot, like gig workers, rideshare drivers, and sales reps. With the IRS mileage rate set at 67 cents per mile, 1,000 miles of driving would equate to $670!

As a result, accurately capturing mileage and maintaining an IRS-compliant mileage log can make a big difference in your bottom line. This can be done by hand, or by using a mileage tracking app, such as Everlance. To see how much the miles you've driven are worth, use our free mileage calculator

Related: Mileage Log Requirements | Everlance

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