For the upcoming 2017 tax year, the standard mileage rates for business, medical and moving purposes has decreased again due to lower gas prices.
Standard Mileage Rates Decrease for Cars, Vans, Pickups or Panel Trucks
As of Jan. 1, 2017, standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- Business miles driven is now 53.5 cents per mile, which is is down from 54 cents for 2016;
- Miles driven for medical or moving purposes is now 17 cents per mile, which is down from 19 cents for 2016;
- For miles driven in service of charitable organizations, it is still 14 cents per mile and has not changed i a few years.
- The option of deducting actual costs of using the vehicle rather than the standard mileage rates is still available to taxpayers, including fuel, maintenance, insurance, deprecation, etc. However, you can never use both the standard rates and actual costs. Also, the standard rate cannot be used for more than four vehicles simultaneously.
- The standard rates are easier to calculate and if you use an older vehicle, may provide a greater deduction than actual costs. However, it is very important to keep a detailed log in the event of an IRS audit.
What to Document
The IRS requires you to keep a detailed log of your mileage, in the event of an IRS audit. It is best to document the following:
- The date of your trip
- Your starting point and destination
- The purpose of your trip
- Your vehicle’s starting and ending mileage
- Tolls or other trip-related costs
There are numerous ways to keep track of your mileage. You can keep a mileage log in a notebook and update it by hand, or use a spreadsheet to continuously track your mileage. You can also use a mileage-tracking app. No matter what you end up using, it is key to update your records regularly to ensure that they are correct.
If you have any questions, or would like to discuss your tax matters, please contact our office. We are here for you.