ISSUE

The IRS has released 2019 “standard mileage rates.”  The business rate has increased, as has the “Medical and Moving” rate – but remember, the deductibility/non-taxability of “moving expenses” is currently suspended until 2026.  And, the charitable mileage rate remains at 14 cents per mile.

 

SITUATION

Idaho Bible College & Seminary (IBCS) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii).  They are not required to file Form 990 annually.

IBCS’ Accounting team is wondering about the amount that they can reimburse employees for “ministry business mileage.”  They call us to ask whether the mileage rates – as prescribed by the IRS – will go down for 2019.  The business mileage rate was 54.5 cents per mile for 2018.

We answer that the business mileage rate actually increased for 2019 to 58 cents per mile.  In addition, the “medical care” mileage rate increased to 20 cents per mile.  The standard mileage rate for charitable services stays at 14 cents per mile.

 

RULES

From Notice 2019-02, Section 3:

The standard mileage rate for transportation or travel expenses is 58 cents per mile for all miles of business use (business standard mileage rate). See section 4 of Rev. Proc. 2010-51. However, § 11045 of the Tax Cuts and Jobs Act, Public Law 115-97, 131. Stat. 2054 (December 22, 2017) (the “Act”) suspends all miscellaneous itemized deductions that are subject to the two-percent of adjusted gross income floor under § 67, including unreimbursed employee travel expenses, for taxable years beginning after December 31, 2017, and before January 1, 2026. Thus, the business standard mileage rate provided in this notice cannot be used to claim an itemized deduction for unreimbursed employee travel expenses during the suspension.

The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170.

The standard mileage rate is 20 cents per mile for use of an automobile: (1) for medical care described in § 213; or (2) as part of a move for which the expenses are deductible under § 217(g). See section 5 of Rev. Proc. 2010-51. Section 11049 of the Act suspends the deduction for moving expenses for taxable years beginning after December 31, 2017, and before January 1, 2026. However, the suspension does not apply to members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station to whom § 217(g) applies. Thus, except for taxpayers to whom § 217(g) applies, the standard mileage rate provided in this notice is not applicable for the use of an automobile as part of a move occurring during the suspension.

 

BOTTOM LINE

  • The 2019 standard mileage rate for business mileage is 58 cents per mile, up from 54.5 cents in 2018.
  • The “medical” mileage rate is 20 cents per mile, up from 18 cents in 2018.
  • For virtually all of your employees, the moving expenses/reimbursements are suspended (thus taxable) through 12/31/25.
  • The statutory rate for charitable mileage remains at 14 cents per mile. This can only be altered by Congress.

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.

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