HR Alert

IRS Announces 2017 Standard Mileage Rates

Optional Standard Mileage Rates Announced for 2017

The Internal Revenue Service (IRS) has issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.

2017 Standard Mileage Rates
Beginning on January 1, 2017, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

  • 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 (unchanged from 2016)

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. The charitable rate is based on statute. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Limitations on Use of 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 regarding taxpayer use of optional standard mileage rates to calculate the amount of a deductible business, moving, medical, or charitable expense, are contained in Rev. Proc. 2010-51.

For Additional Information
Notice 2016-79 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.


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