If you keep track of your mileage for travel related to business, medical, or charitable purposes, you should be aware that the IRS has recently released new mileage rates for the upcoming year. These rates are determined through a study that includes the fixed and variable costs of operating a vehicle, and will take effect January 1, 2019.
Below are the new rates:
- For business travel, you will be able to deduct 58 cents for every mile driven. This is a 3.5 cent increase from the current rate.
- For medical or moving purposes, you will be able to deduct 20 cents per mile driven. This is up 2 cents from the current rate.
- For charitable organization travel, the rate will remain the same, at 14 cents per mile driven.
As a result of tax law changes, employees can no longer claim a miscellaneous itemized deduction for any unreimbursed business travel expenses in 2018. Additionally, moving expenses can now only be deducted by active duty members of the Armed Forces who are moving under order to a permanent change of station.
So, what type of mileage qualifies for a tax deduction?
To recap a past mileage blog which answers this question in more detail:
- Business: Although driving to and from work does not qualify, driving to customers or to different locations for meetings does qualify.
- Medical: There are many different types of medical travel that may count toward a deduction. For more information, don’t hesitate to give us a call.
- Charitable Work: If you volunteer for a non-profit, you can deduct the miles you drive to and from the organization’s location, as well as parking and tolls. Please keep in mind that mileage for charitable work only qualifies if the charity is registered as a tax-exempt organization. Find out if the charity you volunteer at qualifies.
It is important that you keep track of your mileage throughout the year in order to deduct applicable mileage. There are smartphone apps available to help you keep track, or you can use an Excel spreadsheet or any other method with which you feel comfortable. Should you have any questions, please be sure to reach out to us at (610) 670-6170.
Ryder & Company is located in West Lawn, PA and offers a variety of accounting services, part-time CFO services, payroll preparation, and much more! We also offer tax preparation for individuals, as well as businesses and nonprofit entities. We assist many individuals and businesses in and around Wyomissing, Exeter, and Reading.