As usual, at the end of 2018 the IRS revised the mileage reimbursement rates for business, charitable, and medical/moving miles driven. The new rates are as follows for 2019:
Ever wonder: what goes into those rate changes? Is there just a dude sitting at Treasury somewhere who makes the call, or is there a formula of some kind in place? As satisfying as it might be to blame an unknown dude at Treasury, it turns out there are a few known factors that go into the mileage rate calculation:
Generally, when the costs above go up, we see an increase in the mileage rate. And when they go down, we see a decrease. As a consumer, though, it often feels to me like the best indicator that there will be an increase is gas prices. (If you want to geek out and compare historic fuel prices with historic mileage rates, have at it. We did!)
In 2019, gas prices are expected to continue to rise so the IRS has provided a 3.5 cent bump to the business mileage rate. (Woohoo! Don’t spend it all in one place!) If you use an app like Expensify, MileIQ, or Motus to track your business miles, the apps should compute your mileage reimbursement correctly.
If you’re old school and using a paper expense report to get mileage reimbursement from your employer, or to track your own business mileage deduction, then you’ll want to correct all your expense report formulas and forms to reflect the new rate.
And stay tuned: word on the street is that there might be a 2nd mileage rate hike mid-year if gas prices aggressively rise this year.
About: Our team at Blue Fox provides customized, boutique financial and back office services for social impact organizations. Services range from standard bookkeeping and payroll services, to coaching and consulting, to full-blown virtual CFO services. Our mission is to disrupt the traditional accounting model through technology, innovation, and a radically client-focused approach that truly empowers nonprofits and social enterprises. For more information call (321) 233-3311, email firstname.lastname@example.org, and visit www.YourBlueFox.com.
Author: Founder & CEO, the Original Blue Fox, Chantal Sheehan, MS, CFP(r)
Welcome to the Blue Fox Blog! A fairly entertaining source of info and news related to our company, nonprofits, social sector trends, and, of course, accounting. Enjoy!
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