This article is for the 2017 mileage rate.
Click for the 2019 standard mileage rate.
The IRS announced the new standard mileage rate for 2017. The 2017 mileage rate is essential for those who take driving-related deductions. The 2017 standard mileage rates are:
While the business mileage rate gets most of the attention, you can also write off miles for charity, medical or moving purposes.
The standard mileage rate 2017 is 53.5 cents per mile for all miles of business use (business standard mileage rate). The 2017 rate is a dip from the 2016 standard mileage rate of 54 cents per mile. Many factors go into the standard mileage rate, including the cost of gas. That's likely why there was a decrease between 2016 and 2017. The IRS will sometimes even change the mileage rate mid-year if gas prices are volatile enough.
The IRS understands that there is a cost associated with using a personal vehicle for business purposes. You can take a deduction to help offset these costs.
To calculate your deduction, you can use the standard mileage rate. Multiply your business miles by the standard mileage rate for your deduction. If you drove 10,000 miles in 2017, you'd have a deduction of $5,350 (10,000 x 53.5 cents). You can also use the actual expense method. But, many find the standard mileage rate much easier.
There is no official mileage reimbursement rate. The federal government doesn't require businesses to reimburse employees for mileage. But, some states like California do. Also, businesses often reimburse mileage to attract and maintain employees. They often peg their reimbursement rate to the standard mileage rate.
The phrase "mileage allowance rate" is often used interchangeably with the "standard mileage rate." The IRS doesn't technically provide a mileage allowance rate each year. It's pretty simple to use the 2017 mileage rate to calculate your deduction. Multiply your business miles by the rate to arrive at your deduction. For example, the 2017 rate is 53.5 cents per mile, and if you drive 10,000 business miles in 2017, your deduction would be $5,350 (10,000 x .535).
To figure out the mileage rate, the IRS factors in things like average gas prices, depreciation and wear and tear. The IRS doesn't publicize the exact process of determining how it arrives at the rate. It appears as if gas prices factor to a large degree.
The IRS isn't just going to take your word for your miles. You're going to need to be able to back up your claims with a mileage log. The IRS requires you record your beginning odometer reading and:
Additionally, you need to know the total number of miles you drove for business, commuting and personal driving (other than commuting).
You can also potentially deduct mileage that's related to medical purposes. The 2017 rate for the medical rate is 17 cents a mile, a dip from 19 cents in 2016. We've put together an article on how you can take advantage of your medical mileage.
The IRS allows you to deduct miles driven for charity purposes. You can deduct 14 cents per mile for charity reasons. This rate hasn't changed since 1997.
If you're already using MileIQ to automatically track, log and calculate the value of your miles, you can rest easy – we have you covered. Starting in 2017, MileIQ will automatically calculate the value of your drives based on the new standard mileage rates. The leading mileage-tracking app will automatically track your drives in the background, and when you classify your drives, the correct mileage rate is applied. That means your 2017 business drives will properly value at 53.5 cents per mile, medical/moving miles at 17 cents per mile and 14 cents for every charity mile. You can also quickly send yourself or your tax professional detailed mileage logs. These will include the time, date, distance of drives, the values based on the new 2017 mileage rates and any additional information you added like the business purpose.