IRS Bumps Up Mileage Rates

The IRS has released mileage rates for 2018. The standard mileage rate for cars, vans, pickups or panel trucks will be:

• 54.5 cents per mile driven for business, up 1 cent from the 2017 mileage rate.
• 18 cents per mile driven for medical or moving purposes, also up 1 cent from the 2017 mileage rate.
• 14 cents per mile driven in service of charitable organizations. (The charitable rate is set by statute and does not change.)

The IRS calculates its standard mileage rate based on an annual study by an outside firm of both fixed and variable costs connected to operating a vehicle. It averages the cost of owning and operating a vehicle. The fluctuations in the mileage rate from year to year are based on a variety of factors.

The 2018 standard mileage rate applies to miles driven on or after January 1.

Taxpayers do not have to use the IRS standard mileage rate for deducting business vehicle use. They can opt instead to calculate the actual costs of operating your vehicle for business. However, the IRS says you must “maintain adequate records or other sufficient evidence” of those costs.

Source: smallbiztrends.com