When we flip the calendar into the New Year, drivers will be looking at a new, slightly higher standard mileage rate for a deduction for business use on their 2024 federal income tax return.

The IRS bumped up the optional mileage rate to 67 cents a mile in 2024 for business use, up from 65.5 cents for 2023. The new rate kicks in beginning Jan. 1 and would apply to 2024 tax returns that would be filed in 2025.

Other mileage rates, though, will not go up.

The IRS also announced that the mileage rate will be 21 cents a mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, down a penny a mile from 2023.

The mileage rate used when driving in service of charitable organizations remains at 14 cents. This rate is set by statute and will be unchanged.

The rates apply to electric and hybrid-electric automobiles as well as gasoline and diesel-powered vehicles.

What is the IRS standard mileage rate?

The IRS standard mileage rate is a key benchmark that's used by the federal government and many businesses to reimburse their employees for their out-of-pocket mileage expenses.

To be sure, many drivers do not claim the mileage deduction on their federal income tax returns. Companies that reimburse their employees for mileage driven for business often follow the IRS mileage rate, but the employee doesn't claim a deduction if they're reimbursed.

Taxpayers need to keep in mind that getting a tax break for claiming mileage isn't as simple as it used to be, either.

If you work for a company that doesn't reimburse your mileage now, you cannot use the IRS business standard mileage rate to claim an itemized deduction for unreimbursed employee travel expenses. That change took place under the Tax Cuts and Jobs Act of 2017, which remains in effect through 2025. If you're working for an employer who doesn't reimburse mileage for your travel, you're out of luck.

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Taxpayers cannot deduct mileage for their regular moving expenses under the Tax Cuts and Jobs Act, either.

Self-employed individuals can claim business mileage on a tax return. Those filing 2023 returns in 2024, though, need to use the 2023 rate for those returns, not the new IRS mileage rate for 2024.

A self-employed taxpayer who files a Schedule C can use the standard rate to deduct expenses from mileage incurred while doing business. You can use only one method ‒ the standard mileage rate or the business portion of actual expenses ‒ for the same vehicle.