The IRS has released the 2018 optional standard mileage rates to be used to calculate the deductible costs of operating an automobile for business, medical, moving and charitable purposes. Beginning January 1, 2018, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
- 54.5 cents per mile for business miles driven (up from 53.5 cents in 2017)
- 18 cents per mile for medical and moving expenses (up from 17 cents in 2017)
- 14 cents per mile for miles driven for charitable purposes (permanently set by statute at 14 cents)
A taxpayer may not use the business standard mileage rate after using a depreciation method under Code Sec. 168 or after claiming the Code Sec. 179 deduction for that vehicle. A taxpayer may not use the business rate for more than four vehicles at a time. As a result, business owners have a choice for their vehicles: take the standard mileage rate, or “itemize” each part of the expense (gas, tolls, insurance, etc., and depreciation).
Contact your MCB Tax Advisor at 703-218-3600 to learn how these changes impact your business.