In December, the
Internal Revenue Service issued the 2017 optional standard mileage rates used
to calculate the deductible costs of operating an automobile for business,
charitable, medical or moving purposes.
With gas prices dropping
in 2016 and vehicle prices holding steady, the optional mileage rates for
business, medical and moving expenses for 2017 dropped to their lowest levels
in six years.
As of January 1, 2017,
the standard mileage rates for the use of a car (also vans, pickups or panel
trucks) will be:
·
53.5 cents per mile for
business miles driven (down from 54 cents for 2016);
·
17 cents per mile driven
for medical or moving purposes (down from 19 cents for 2016);
·
14 cents per mile driven
in service of charitable organizations (permanently set by statute).
The standard mileage
rate for business is based on an annual study of the fixed and variable costs
of operating an automobile. The rate for medical and moving purposes is based
on the variable costs.
Proper use of the
business standard mileage rate is optional and takes place the of deducting all actual costs of the automobile allocable to
business use (such as depreciation, maintenance and repairs, tires, gasoline, oil, insurance,
and license and registration fees).
The business standard
mileage rate may NOT be used for an automobile after using any depreciation
method under the Modified Accelerated Cost Recovery System (MACRS) or after
claiming a Section 179 deduction for that automobile. In addition, the business standard mileage
rate cannot be used for more than four vehicles being used simultaneously.
For more details and other
requirements, visit www.irs.gov, Rev. Proc. 2010-51.
Source: IR-2016-169, Notice
2016-79
