IRS Mileage Rate Increase Now in Effect
It’s January and we’re taking a break from our usual topics to ask: Have you reset your mileage rates? In case you missed it, the IRS announced a change for 2019.
The deductible rate for mileage has increased as of January 1. The new rate for business mileage (for cars, vans, pickups or panel trucks) is 58 cents, an increase of three-and-a-half cents over the 2018 rate.
Rates for medical or moving purposes increased two cents to 20 cents per mile, while the rate for charitable organizations remained unchanged at 14 cents.
Businesses may reimburse employees for business miles at whatever rate they wish, whether at, less or more than the IRS-set rate. However, any reimbursement greater than the IRS rate of 58 cents per mile must be reported as income to the employee. Most organizations polled reimburse at the IRS rate, while a few reimburse under the IRS cap.
Despite the current lower gasoline prices, the new rate is the second highest in the last 20 years, a half-cent less than the rate for the period of July – December 2008. That year saw a precipitous rise to record heights in the price of oil (more than double the start of the year), and therefore of gasoline. The rate from January through June was 50.5 cents, but was jumped up mid-year in response to the soaring price. Only twice in the last two decades has there been a mid-year adjustment to the rate — in 2008 and again in 2011. Generally the new rate is set for 12 months at a time.
Speaking of mileage, if you’re driving your AP department to greater efficiencies, check out how vendor self-service can benefit your operations. Click here to request more information or call (678) 335-5735.
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