On Friday, December 14th, 2018, the IRS released the 2019 standard mileage rates with notice 2018-251. These are very important numbers which are used for many calculations such as mileage reimbursements, expenses related to driving for businesses, medical mileage, and charitable deduction for mileage.
The increase in business mileage from 54.5 cents up to 58 cents is one of the largest increases ever from year to year. It is also the second highest the standard mileage rate has been since the second half of 2008 when it was 58.5 cents per mile. The landscape though for claiming the mileage deduction has changed with the Tax Cuts and Jobs Act. Starting with the 2018 tax year, taxes dueApril 2019, taxpayers cannot claim miscellaneous itemized deductions for unreimbursed travel expenses as they have in years passed.
The moving mileage rate amount is tied to the medical rate and has increased from 18 cents in 2018 to 20 cents in 2019. Similar to 2018, it maybe more advantageous to use the Schedule A medical deduction as they are subject to a 7.5% floor of adjusted gross income rather than 10% as they were in 2017 and will be in 2020. Moving expenses are all but removed as a deduction taxpayers can take. Only members of the Armed Forces on active duty moving under orders to a permanent change of station can take moving expense asa deduction. If you are moving for any other reason, those deductions are no longer allowed as of tax year 2018.
The rate for charitable mileage has not increased since 1998 when it went from 12 cents per mile to 14 cents per mile. Like years of past, it has stayed at 14 cents per mile. To achieve this deduction, the mileage must be for a charitable purpose. For example, volunteering at a church camp and driving equipment from the church to the camp and back. The mileage on the round trip would be deductible at14 cents per mile.
Curious as to how these rate changes will affect your 2019 taxes? Call today and schedule a meeting with Fitzpatrick, Johnson & Associates CPAs, (503) 472-8161.
Fitzpatrick, Johnson & Associates CPAs, is a full service accounting firm providing tax, financial statement, and bookkeeping services based in McMinnville, OR, southwest of Portland, OR.