Beginning on January 1, 2018, the standard mileage rates for the use of a car, van, pickup or panel truck 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 standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.
Note: The 2018 standard mileage rates will not begin until January 1, 2018. All 2017 rates are still in effect until December 31, 2017, and all mileage driven in 2017 should still be reported with the 2017 rates of:
- 53.5 cents per mile for business miles driven, down from 54 cents in 2016
- 17 cents per mile driven for medical or moving purposes, down from 19 cents from 2016
- 14 cents per mile driven in service of charitable organizations
The impact of these rates in 2018 is uncertain. The current tax reform proposals would eliminate the mileage deduction for moving expenses and job-related business mileage deductions for employees filing a Schedule A (i.e., expenses unreimbursed by employer). In addition, both proposals would disallow – on the employer’s side – favorable tax treatment for employer reimbursement of employee moving expenses. However, under Senate version of the bill, the tax treatment of these deductions would sunset, which means that the treatment of expenses would go back to the way the law is now (in 2017) beginning in 2026.
Both proposals would retain the charitable donation deduction, including for charitable miles. In fact, under the House proposal, the mileage rate for charity would finally be indexed for inflation.