The IRS today issued an advance version of Notice 2019-02 providing the standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical or moving purposes in 2019.
Notice 2019-02 [PDF 16 KB] provides that beginning January 1, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
A provision of the new U.S. tax law (Pub. L. No. 115-97, enacted December 22, 2017) suspends all miscellaneous itemized deductions that are subject to the 2% of adjusted gross income floor, including unreimbursed employee travel expenses, for tax years beginning after December 31, 2017, and before January 1, 2026. Thus, the business standard mileage rate provided by Notice 2019-02 cannot be used to claim an itemized deduction for unreimbursed employee travel expenses during the suspension. However, deductions for expenses that are deductible in determining adjusted gross income are not suspended. For example, 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 are entitled to deduct unreimbursed employee travel expenses as an adjustment to total income (not as an itemized deduction) and therefore may continue to use the business standard mileage rate.
The standard mileage rate deduction for moving expenses was suspended for tax years beginning after December 31, 2017, and before January 1, 2026. However, the suspension does not apply to members of the U.S. Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station. Thus, except for these taxpayers, the standard mileage rate provided by Notice 2019-02 does not apply for the use of an automobile as part of a move occurring during the suspension.
In addition to providing the standard mileage rates, Notice 2019-02 provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan.
For an automobile the taxpayer owns and uses for business purposes, 26 cents of the 58 cents per mile rate in 2019 is attributable to depreciation expense (up from 25 cents per mile for 2018).
Read a related IRS release: IR-2018-251
© 2020 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.