How Tax Reform Law Changes Mileage, Moving and Travel Expense Deductions

How Tax Reform Law Changes Mileage, Moving and Travel Expense Deductions

The Tax Cuts and Jobs Act, the tax reform act signed into law at the end of 2017, has significant changes to moving and travel expenses, including expenses incurred by employees related to their work, that were not reimbursed.

Changes to the deduction for moving expenses

The Tax Cuts and Jobs Act ends the deduction for moving expenses for tax years beginning after Dec. 31, 2017.  This does not apply to members of the Armed Forces of the United States on active duty who move pursuant to a military order related to a permanent change of station.

Changes to the deduction for un-reimbursed employee expenses

The Tax Cuts and Jobs Act also miscellaneous itemized deductions for un-reimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel.

This also means that business mileage cannot be used to claim an itemized deduction for un-reimbursed employee travel expenses in taxable years beginning after Dec. 31, 2017. 

The standard mileage rates for the use of a car, van, pickup or panel truck for 2018 remain, even if the un-reimbursed employee expense portion is no longer an itemized deduction:

  • 54.5 cents for every mile of business travel driven, a 1 cent increase from 2017.
  • 18 cents per mile driven for medical purposes, a 1 cent increase from 2017.
  • 14 cents per mile driven in service of charitable organizations, which is set by statute and remains unchanged.

Increased Depreciation Limits

The Tax Cuts and Jobs Act increases the depreciation limitations for passenger automobiles placed in service after Dec. 31, 2017, for purposes of computing the allowance under a fixed and variable rate plan. The maximum standard automobile cost may not exceed $50,000 for passenger automobiles, trucks and vans placed in service after Dec. 31, 2017. Previously, the maximum standard automobile cost was $27,300 for passenger automobiles and $31,000 for trucks and vans.

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