Business mileage reimbursement rate explained

The business mileage reimbursement rate is an optional standard mileage rate used in the United States for purposes of computing the allowable business deduction, for Federal income tax purposes under the Internal Revenue Code, at, for the business use of a vehicle. Under the law, the taxpayer for each year is generally entitled to deduct either the actual expense amount, or an amount computed using the standard mileage rate, whichever is greater.

The business mileage reimbursement rate is used by some employers for computing employee reimbursement amounts when an employee operates a motor vehicle not owned by the employer for the employer's business purposes. The General Services Administration (GSA) sets the rate for federal jobs. In general, the GSA rate matches the annual rate set by the IRS, although by law the government employee reimbursement rate cannot exceed the mileage rate set by the IRS for business deductions.[1]

Reimbursement by an employer on a per-mile basis is also used in other countries; it offers a similar simplification to payment of subsistence per diem.

Reimbursement rates since 1991

Year Automobile Rate (IRS) Privately-Owned Aircraft Rate (GSA)Motorcycle
1991 27.5 cents/mile
1992 28.0 cents/mile
1994 29.0 cents/mile
1995 30.0 cents/mile
1996 31.0 cents/mile
1997 31.5 cents/mile
1998 32.5 cents/mile
Jan–Mar 1999 32.5 cents/mile
Apr–Dec 1999 31.0 cents/mile
2000 32.5 cents/mile
2001 34.5 cents/mile
2002 36.5 cents/mile
2003 36.0 cents/mile
2004 37.5 cents/mile
Jan–Aug 2005 40.5 cents/mile
Sep–Dec 2005 48.5 cents/mile
2006 44.5 cents/mile
2007 48.5 cents/mile
Jan–June 2008 50.5 cents/mile
July–Dec 2008 58.5 cents/mile
2009 55.0 cents/mile $1.24/mile
2010 50.0 cents/mile $1.29/mile
Jan–June 201151.0 cents/mile $1.29/mile
July–Dec 2011 55.5 cents/mile $1.29/mile
2012 55.5 cents/mile $1.31/mile
2013 56.5 cents/mile $1.33/mile
2014 56.0 cents/mile $1.31/mile
2015 57.5 cents/mile $1.29/mile
2016 54 cents/mile $1.17/mile
2017 53.5 cents/mile $1.17/mile
2018 54.5 cents/mile[2] TBA
2019 58 cents/mile[3]
202057.5 cents/mile[4] $1.27/mile54.5 cents/mile
202156 cents/mile[5]
Jan–June 202258.5 cents/mile
July–Dec 202262.5 cents/mile[6]
202365.5 cents/mile[7]
202467 cents/mile[8]

References

Form 2106, Internal Revenue Service, U.S. Dept. of the Treasury (for applicable years); IRS Rev. Proc. 2005–78; IRS Rev. Proc. 2006–49; IRS Rev. Proc. 2008–72.
  1. Travel and Subsistence Expenses; Mileage Allowances, 5 U.S.C. 5704(a)(1), Available from: US Code Main Page, Government Printing Office; Accessed January 28, 2009. "In any year in which the Internal Revenue Service establishes a single standard mileage rate for optional use by taxpayers in computing the deductible costs of operating their automobiles for business purposes, the rate per mile established by the Administrator (of the GSA) shall not exceed the single standard mileage rate established by the Internal Revenue Service."
  2. https://www.irs.gov/pub/irs-drop/n-18-03.pdf IRS Notice 2018-03
  3. https://www.irs.gov/pub/irs-drop/n-19-02.pdf IRS Notice 2019-02
  4. https://www.irs.gov/pub/irs-drop/n-20-05.pdf IRS Notice 2020-05
  5. https://www.irs.gov/pub/irs-drop/n-21-02.pdf IRS Notice 2021-02
  6. Web site: IRS increases mileage rate for remainder of 2022 | Internal Revenue Service .
  7. Web site: IRS issues standard mileage rates for 2023; business use increases 3 cents per mile Internal Revenue Service . 2023-01-19 . www.irs.gov . en.
  8. Web site: IRS Mileage Rates 2024 Everlance. 2023-12-15 . www.everlance.com . en.

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