The Internal Revenue Service (IRS) has provided guidance on the updated rules for using the optional standard mileage rates in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. The updates reflect changes resulting from the Tax Cuts and Jobs Act (TCJA) that went into effect at the end of 2017.
The IRS guidance also provides rules to substantiate the amount of an employee's ordinary and necessary travel expenses reimbursed by an employer using the optional standard mileage rates. The TCJA suspended the miscellaneous itemized deduction for most employees with unreimbursed business expenses, including the costs of operating an automobile for business purposes. The exceptions are Armed Forces reservists, qualifying state or local government officials, educators and performing artists. These individuals may continue to deduct unreimbursed business expenses during the suspension.