intandem No Comments

The IRS announced that the business standard mileage rate for transportation expenses paid or incurred beginning January 1, 2019, will be 58 cents per mile, up 3.5 cents from the 54.5 cents-per-mile rate in effect during 2018 [Notice 2019-02, released 12-14-18].

The mileage rate may be used to compute the amount to reimburse employees who are using their own cars for business purposes. It may also be used by employers that elect to use the “cents-per-mile” valuation method for purposes of determining the amount that needs to be imputed to an employee’s income for personal use of certain company-owned or leased nonluxury vehicles. However, it may not be used by employees in claiming a tax deduction for unreimbursed employee business expenses, since such deductions are suspended by the Tax Cuts and Jobs Act.

REMINDER – There is no legal requirement in the private sector to reimburse employees for miles driven in the course and scope of their job at the federal IRS rate.  Employers may choose a rate that is higher or lower than this IRS standard. Employers that intend to continue using the business standard mileage rate should make sure they change to the 2019 rate for all affected travel on or after January 1, 2019. And remember that business miles driven in December 2018 that show up on an employee’s expense report in 2019 are governed by the rules applicable to the corresponding 2018 mileage rate.

Leave a Reply

Your email address will not be published. Required fields are marked *