IRS Announces 2018 Standard Mileage Rates

The Internal Revenue Service (IRS) has issued the 2018 optional standard mileage rates (Notice 2018-3). The rate for business use of a vehicle will increase slightly in 2018, after having decreased the past two years. For business use of a car, van, pickup truck or panel truck, the 2018 rate will be 54.5 cents per mile (up from 53.5 cents in 2017).

The standard mileage rate for medical or moving purposes will increase one cent in 2018 to 18 cents per mile (17 cents per mile in 2017). The rate in service for charitable organizations remains unchanged at 14 cents per mile (currently fixed by Congress).

The optional standard mileage rates are used to calculate the deductible amount of business, moving, medical or charitable expense (miles driven times the applicable rate). Mileage accumulated by driving to and from your primary workplace or office is excluded from the deduction. Under current law, taxpayers have the option of deducting their actual expenses rather than using the standard mileage rates. If you use your vehicle for business and personal use, you will want to keep adequate records and subtract out the personal mileage.

The pending tax reform legislation may affect some of these deductions. For more information, check out the IRS website.