IRS Increases Mileage Reimbursement Rate for 2019

The Impact on Business and Consumer Services - Real Estate

As of 2019, the Internal Revenue Service (IRS) has increased the mileage reimbursement rate for business-related travel. This change has significant implications for businesses in various sectors, including the real estate industry. In this article, we will explore the details of this rate increase and how it affects professionals and consumers in the business and consumer services sector, particularly in real estate.

Understanding the Mileage Reimbursement Rate

The mileage reimbursement rate is the amount that businesses can compensate their employees or contractors for using their personal vehicles for work-related travel. It serves to cover the costs associated with gasoline, vehicle maintenance, and general wear and tear.

The IRS sets the standard mileage rate annually based on various economic factors, such as gas prices, vehicle depreciation, and maintenance expenses. For 2019, the IRS has increased the standard mileage rate to $0.58 per mile. This represents a 3.5 cent increase compared to the previous year.

Impact on Real Estate Professionals

In the real estate industry, professionals often rely heavily on their vehicles to meet clients, visit properties, and perform other business-related tasks. The increased mileage reimbursement rate can alleviate some of the financial burden associated with these activities.

Real estate agents, brokers, and property managers can now be reimbursed at the new rate of $0.58 per mile for their business-related travel. This includes mileage accumulated for property showings, open houses, client meetings, and other real estate activities.

With the higher mileage reimbursement rate, real estate professionals can better manage their transportation expenses and, in turn, invest more in building their businesses. They can allocate the saved funds towards marketing initiatives, training programs, technology upgrades, and other areas that contribute to their overall success.

Benefits for Consumers

While the IRS mileage reimbursement rate increase primarily affects businesses, it indirectly benefits consumers in the real estate sector as well. Higher reimbursement rates for real estate professionals can lead to more competitive services, streamlined operations, and enhanced customer experiences.

Consumers working with real estate professionals can have peace of mind knowing that the professionals they engage with can allocate adequate resources towards their needs. This allows for a smoother process when buying, selling, or renting properties, as real estate professionals can focus on delivering exceptional service without compromising on their own well-being.

Best Practices for Mileage Tracking and Reimbursement

To take full advantage of the increased mileage reimbursement rate, it is crucial for both businesses and real estate professionals to implement effective mileage tracking systems. Accurate mileage tracking ensures transparency and simplifies the reimbursement process.

Here are some best practices to consider:

• Use mileage tracking apps or software: There are various mobile applications and software programs available that can automatically track and record mileage for business purposes. These tools can also generate comprehensive reports for reimbursement purposes.
• Maintain mileage logs: Keep detailed mileage logs that include the date, starting and ending locations, purpose of the trip, and total miles driven. This helps in documenting business-related travel for reimbursement purposes and tax deductions.
• Consult with a tax professional: Seek advice from a qualified tax professional who specializes in business and real estate taxation. They can guide you on maximizing your mileage deductions and complying with IRS regulations.

Conclusion

The IRS increase in the mileage reimbursement rate for 2019 has a notable impact on businesses and consumers, particularly in the real estate industry. Real estate professionals can now benefit from the higher reimbursement rate, allowing them to allocate more resources towards growing their businesses. Consumers, on the other hand, can expect improved services and a smoother real estate experience.

To make the most of the increased rate, it is essential for businesses and real estate professionals to implement proper mileage tracking and reimbursement practices. By doing so, they can optimize their deductions, ensure compliance, and streamline their operations.