SignalsAZ.com Prescott News Podcast - IRS Increases the Standard Mileage Rate for Businesses

Episode Date: January 2, 2025

Send us a text and chime in!On December 19, the Internal Revenue Service announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025. Meanwhile, the mileage rates for vehicles used for other purposes will remain unchanged from 2024. Optional standard mileage rates are used to calculate the deductible costs of operating vehicles for business, charitable, and medical purposes, as well as for active-duty members of the Armed Forces who are moving. Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup, or panel truck will be: 70 cents per mile driven... For the written story, read here >> https://www.signalsaz.com/articles/irs-increases-the-standard-mileage-rate-for-businesses/Check out the CAST11.com Website at: https://CAST11.com Follow the CAST11 Podcast Network on Facebook at: https://Facebook.com/CAST11AZFollow Cast11 Instagram at: https://www.instagram.com/cast11_podcast_network

Text to Speech Audio articles made possible by the Quest Grant at Yavapai College. Tuition-free industry recognized certificates for your career. On December 19th, the Internal Revenue Service announced that the optional standard mileage rate for automobiles driven for business will increase by three cents in 2025. Meanwhile, the mileage rates for vehicles used for other purposes will remain unchanged from 2024. Optional standard mileage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active duty members of the armed forces who are moving. Beginning January 1st, 2025, the standard mileage rates for the use of a car, van, pickup, or panel

truck will be. 70 cents per mile driven for business use, up 3 cents from 2024. 21 cents per mile driven for medical purposes, the same as in 2024. 21 cents per mile driven for moving purposes for qualified active duty members of the armed forces, changed from last year. 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024. The rates apply to fully electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles. While the mileage rate for charitable use is set by statute, the 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, meanwhile, is based on only the variable costs from the annual study. Under the Tax cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station. Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle. Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the

first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses. For a lease vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals. Notice 2025 to 5 contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed and variable rate, F-A-V-R, plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025, for which employers may calculate mileage allowances using a cents per mile valuation rule or the fleet average valuation rule.

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