Taxpayers should know the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The standard mileage rate for business is based on an annual study of both fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based solely on the variable costs.
While the 2017 business mileage rate decreased half a cent per mile from 2016, the medical and moving expense rates each dropped 2 cents per mile. Set by statute, the charitable rate remains unchanged. Effective Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) is:
- 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
Of course, as another alternative to using the standard business mileage rate, taxpayers may calculate the actual costs of using their vehicle. However, 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 may not be used for more than four vehicles used simultaneously.
It is wise for both individual and business taxpayers located in the Tri-State area to consult with a tax professional to help any assess their current tax situation looking ahead to the future. If you have any question about taxes, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation call 212-490-0704.
