WASHINGTON ― The Internal Revenue Service today issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.
  • 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.
  • 14 cents per mile driven in service of charitable organizations.

The business mileage rate and the medical and moving expense rates each increased 1 cent per mile from the rates for 2017. The charitable rate is set by statute and remains unchanged.

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.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.  These and other requirements are described in Rev. Proc. 2010-51.

Notice 2018-03, posted today on IRS.gov, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

Tax Tips Small Business

  • Electing to Expense the Cost of Your Business Assets

    Section 179 deduction limits increase

    The IRS allows taxpayers the option of either depreciating some assets over a specified number of years or deducting all or a portion of the cost in one year. The expense election, commonly referred to as the Section 179 deduction, is made in the year the asset is placed in service. The benefit is a large deduction in the current year that is not reduced even if the asset is placed in service late in the tax year.

    Read more ...

Small Business Quick Tip

  • DOT Hours of Service

    Truck drivers and other employees who are subject to the Department of Transportation's "hours of service" rules are allowed to deduct 80 percent of their meals in 2016. In lieu of using actual expenses for meals and incidental expenses, you can deduct the federal rate of $63 per day.
Saturday, 21st July 2018
EASEAL_L

What is an Enrolled Agent and why should I care?

Click Here to find out

 

NATP Member

Follow us on

TwitterFacebook

Tax Tips Personal

  • Direct Deposit of Your Tax Refund

    More options are available to you

    The IRS is now allowing taxpayers who are due a tax refund the option of having that refund split up and deposited in up to three different bank accounts.

    Read more ...

Personal Quick Tip

  • Summer Day Camp

     

    Along with the lazy, hazy days of summer come some extra expenses, including summer day camp. But, the IRS has some good news for parents: those added expenses may help you qualify for a tax credit.

    Many parents who work or are looking for work must arrange for care of their children under 13 years of age during the school vacation. The Child and Dependent Care Credit is available for expenses incurred during the summer and throughout the rest of the year.