Knowing how to properly report all the information that might be relevant to your tax return can be a complicated procedure. After all, this is why many people choose to get the help of a professional accountant or bookkeeper, particularly when they are preparing their tax returns as a result of their business expenses throughout the year. It’s important to make sure not only that you are giving the IRS the accurate information that they need to make decisions about how much tax you reasonably need to pay, but also to make sure that you are getting the reimbursements that you are eligible for.
In 2016, the IRS issued the 2017 optional mileage rates that can be used to determine the costs associated with owning and operating a business automobile for various purposes. These IRS mileage reimbursement rules can change on a yearly basis and also apply to automobiles that are used for charitable, moving, or medical reasons.
For those who struggle to understand the IRS mileage reimbursement rules, it may help to talk to a representative from the IRS directly for further support.
The IRS Mileage Reimbursement Rules for 2017
In 2017, the standard rates of reimbursement that individuals can expect to access for the use of a van, car, pickup or panel truck are generally rated at around:
– 53.5 cents for each business mile driven. This amount has been reduced from a total of 54 cents in 2016.
– 17 cents a mile for every moving or medical mile driven. This amount has again been moved down from an average of 19 cents during 2016.
– 14 cents per mile for every mile that is driven in the service of a charitable organization.
The Mileage Reimbursement Changes
One thing that many businesses find with the IRS Mileage Reimbursement rules is that they tend to go down every year. The business mileage rate has been decreased by half of a cent for every mile, while the rates available for medical and moving mileage dropped by two cents a mile since 2016. As usual, however, the charitable rate which was set by statute will remain unchanged.
For those who wonder how this amount is calculated, it’s worth noting that the typical rate put in place for the average business comes from an annual evaluation of the variable and fixed costs that come with operating a vehicle on a regular basis. The expense for medical vehicles is also based on variable costs. Taxpayers will always have an opportunity to calculate the actual costs of using their vehicle, instead of sticking to the standard mileage rates but many use these rates instead for simplicity.
Importantly, a taxpayer cannot use the business standard mileage rate for any vehicle after having used a depreciation method that is included under the modified accelerated cost recovery system or after claiming a deduction from section 179 for their vehicle. The requirements that are put in place for mileage reimbursement can be accessed in greater detail on the IRS website.
