Changes in Standard Mileage Rates for 2018
The Internal Revenue Services issued the 2018 optional standard mileage rates used to calculate the deductible costs of using a vehicle for business, charitable, medical, or moving purposes.
Beginning on January 1st, 2018, the standard mileage rate for the use of a car will be:
- 5 cents per mile of business travel driven (increased by 1 cent from 2017) or
- 18 cents per mile for medical or moving purposes (increased by 1 cent from 2017).
- 14 cents for every mile driven for charitable organizations.
The standard mileage rate for businesses is based on an annual study of fixed and variable costs of operating a vehicle. The rate for medical and moving purposes is based on variable costs.
You always have the option of calculating the actual cost of using your vehicle instead of using the standard mileage rates.
There are three limitations to the standard mileage rate:
- You may not use the business standard mileage rate for a vehicle after using any deprecation method under the Modified Accelerated Cost Recovery System or
- If you have claimed a Section 179 deduction for the vehicle.
- Standard mileage rates cannot be used for more than four vehicles used simultaneously.
In 2018 employees will not be able to deduct unreimbursed business mileage because miscellaneous itemized deductions are no longer deductible.
If you have any questions, please contact us.