Standard Mileage Rate

What is standard mileage rate?

The standard mileage rate is a rate set by the IRS that a taxpayer can use to compute the tax-deductible costs of operating his vehicle for certain purposes. The standard mileage rates for 2017 are: 53.5 pennies per mile for business miles driven; 17 pennies for every mile for medical purposes or for moving; and 14 pennies for each mile driven while serving good cause.

More profound definition

Every year, the IRS sets a standard mileage rate. Tax-deductible miles must have been driven for at least one of the accompanying purposes:

• Business
• Charitable service
• Medical
• Moving

In the event that a taxpayer decides to utilize the standard mileage rate to figure the cost of his vehicle for the tax year, he can't deduct other driving-related expenses, for example, oil changes and other routine maintenance costs. Numerous taxpayers opt to deduct the standard mileage since it's less difficult than tracking and counting receipts for gas and maintenance.
To claim standard mileage on a vehicle, the taxpayer must possess or lease it. A taxpayer can claim the standard mileage rate for up to four cars. At least five cars falls into the category of fleet operation.

Standard mileage rate model

Tammy possesses a 2014 Honda Accord and uses it for business purposes. She claims the mileage that she puts on the vehicle as a deduction when she documents her taxes. To claim the business mileage, Tammy logs the miles she drives for work into a booklet she keeps in her vehicle's glove compartment.
At the point when she records her 2017 taxes, Tammy will utilize the standard mileage rate for business driving, which is $0.535. Expecting Tammy travels 3,000 miles for business purposes during 2017, her total standard mileage deduction would be $1,605 (0.535 x 3,000).

Features

• The rates are modified by the IRS every year.
• The deduction for personal vehicle use as a moving expense has been killed with the exception of well-trained military staff.
• There are three standard mileage rates used to work out the deduction, one each for utilization of a personal vehicle on business, for a charitable purpose, and for a medical purpose.