Standard mileage rates, depreciation amounts updated
 

Standard mileage rates, depreciation amounts updated

The IRS on Friday provided information to taxpayers about changes in the use of standard mileage rates and increased depreciation limits for passenger automobiles as a result of P.L. 115-97, known as the Tax Cuts and Jobs Act, which made amendments to Secs. 67 and 217.

In Notice 2018-42, the IRS modified Notice 2018-03, which provided the optional 2018 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.

Because the TCJA suspended the miscellaneous itemized deduction under Sec. 67 for unreimbursed employee business expenses from 2018 to 2025, the notice explains that the standard mileage rate will not apply to those expenses during that period.

However, an exception to that disallowance applies to members of a reserve component of the U.S. armed forces, state or local government officials paid on a fee basis, and certain performing artists. They are permitted to deduct mileage expenses on line 24 of Form 1040, U.S. Individual Income Tax Return, (an above-the-line deduction) and may continue to use the business standard mileage rate, which remains at 54.5 cents per mile for these eligible taxpayers. Read more on the Journal of Accountancy.