If workers for your organization receive a mileage reimbursement, it is important to know who can claim mileage on their tax return. The rules for 2024 make clear which workers are eligible for a tax deduction and which are not.
2024 IRS mileage deduction rules
The current rules cover tax years 2018-2025, when the 2017 tax cuts expire. These rules separate employed workers from independent contractors. This distinction determines who can deduct mileage on their taxes.
Can employees claim mileage on taxes?
For 2024, employees cannot claim business mileage on their tax returns. This is because the 2017 Tax Cuts and Jobs Act eliminated miscellaneous tax deductions. Prior to tax year 2018 employees could deduct business mileage using the IRS standard business rate.
Can 1099 workers claim mileage on taxes?
For tax year 2024, 1099 workers can still claim business mileage on their tax returns. The IRS treats these workers as self-employed independent contractors. So they can deduct business mileage on Schedule C of their tax returns. The 2024 IRS business mileage rate for tax deductions is $.67/mile.
How to claim business mileage on your 2024 tax return
For eligible workers, it is essential to maintain an accurate record of business trips and mileage. This mileage record should include:
- Dates of travel
- Destination and business purpose
- Miles driven for each trip
- Total annual business mileage
Using these records, you simply calculate the total business mileage for the year and multiply it by $.67/mile. This is the business mileage rate for 2024. To make record-keeping easier, try using a mileage tracking app.
Avoiding taxes with mileage reimbursement
Employees are eligible for tax-free mileage reimbursements from their employers. To set up a non-taxable plan, businesses should adhere to the rules in IRS Publication 463.
Rules for 2024 tax-free mileage reimbursement
- Use the federal mileage rate (either $.67/mile or equivalent using a FAVR plan or mileage allowance)
- Keep an IRS-approved record of business travel (a mileage log or mileage tracking app)
For more in-depth information about how to keep mileage reimbursements tax-free, read our guide to Publication 463.
Choosing a mileage tracking app
When you track your own mileage or issue reimbursements to employees, it helps to have a convenient mileage capture system. There are many apps on the market to choose from. The best ones have the following features:
- Accurate GPS mileage capture with privacy protections
- Hands-free mode to automate mileage tracking
- Automated calculations and convenient approval process
- Admin dashboard to create reports for business insights
- Low battery use and intuitive interface
To learn more about choosing the best mileage tracker, read our mileage tracking checklist.
Or sign up for a free trial of the mLog mileage app.