Due to changes under the 2017 tax act (Pub. L. No. 115-97), The Internal Revenue Service issued a Notice 2018-42 on May 25, 2018, to modify Notice 2018-03 regarding the use of standard mileage rates for business expenses, moving expenses, and fixed and variable rate (FAVR) payments.
Under the new 2017 tax act, the deductions for moving expenses (on page 1 of Form 1040) and unreimbursed employee travel expense (on Form 1040 schedule A) are suspended for the taxable years beginning in 2018 - 2025. Therefore, the IRS noted that the business standard mileage rate cannot be used to claim an itemized deduction for unreimbursed employee travel expenses (with an exception for members of a reserve component of the Armed Forces of the United States, state or local government officials paid on a fee basis, and certain performing artists). The IRS also noted the act's suspension of the deduction for moving expenses (other than for certain military moves) eliminates the need for the standard mileage rate for such moves.
Following are the modified standard mileage rates for use of a vehicle starting Jan. 1, 2018:
The Service also noted the act's increase in the depreciation limits for passenger automobiles placed in service after 2017, and thus, increased the maximum standard automobile cost to $50,000 (including trucks and vans) from $27,300 for passenger automobiles and $31,000 for trucks and vans, for a FAVR allowance. For more information on this topic, contact us in one of our many locations.
Wednesday, April 24, 2019 | 7:30 AM – 9:30 AM EDT | The Hartford Club