AI Financial Assistant
BetaAsk questions about your calculation results
3 free questions per session
AI provides general information, not financial advice. Always consult a qualified professional.
How Mileage Reimbursement Works
Mileage reimbursement compensates employees for using personal vehicles for business travel. The reimbursement is calculated by multiplying the miles driven by the per-mile rate. The IRS sets a standard rate that covers gas, maintenance, insurance, and depreciation.
IRS Standard Mileage Rates
The IRS updates the standard mileage rate annually. For 2024, the business rate is 67 cents per mile. Medical and moving (military only) is 21 cents per mile. Charitable driving is 14 cents per mile (set by statute).
Standard Mileage Rate vs Actual Expenses
You can deduct either the standard mileage rate or your actual vehicle expenses (gas, oil, repairs, insurance, depreciation, registration). Track both and use whichever method gives you the larger deduction. Once you choose actual expenses for a vehicle, you generally cannot switch back.
Record Keeping Requirements
The IRS requires a written log of each trip including the date, destination, business purpose, and miles driven. Apps like MileIQ can automate tracking. Keep records for at least three years in case of an audit.
Frequently Asked Questions
For 2024, the IRS standard mileage rate for business use is 67 cents per mile. This rate is updated annually in January based on an analysis of the fixed and variable costs of operating a vehicle.
If your employer reimburses at or below the IRS standard rate, the reimbursement is not taxable income. Reimbursement above the IRS rate is taxable for the excess amount. Self-employed individuals deduct mileage on their tax return.
No. Commuting from home to your regular workplace is not deductible. However, travel from your workplace to a client site, temporary work location, or second job is deductible. Travel from a home office to any work location is also deductible.
The rate covers gasoline, oil, maintenance, repairs, tires, insurance, registration fees, and depreciation. It does not cover parking fees and tolls, which can be deducted separately.