The Internal Revenue Service has put a higher mileage rate in place effective July 1, giving some drivers a larger reimbursement benchmark for business use of a personal vehicle. The change stands out because IRS mileage updates are not typically made in the middle of the year.
The biggest beneficiaries are employees whose companies reimburse business driving based on the IRS standard mileage rate. When employers use that federal rate as their guide, workers who log eligible miles for work could see larger repayments for trips taken after the new rate took effect.
The update also matters for businesses because many employers use the IRS figure to simplify expense policies and keep reimbursements consistent. At the same time, workers should remember that if they are reimbursed for those business miles, they generally cannot also claim a tax deduction for the same driving expense.
For drivers, the key issue is whether their mileage falls under employer-approved business travel and whether their company follows the IRS standard. That means the midyear increase may help many work-related drivers, but it will not apply the same way to every trip or every taxpayer.
