If you use a vehicle for your business, then it's important to understand the IRS mileage rate for business, charity, and medical companies. Knowing how you can report your miles and receive the tax relief you need for the hours and money spent on your vehicle can help to ensure that you make the most out of your profits, while ensuring that you pay the right amount on your taxes too.
Unfortunately, many people find that they struggle when it comes to ensuring that they make the right choices regarding their mileage calculations. After all, thousands of people every year make mistakes in their tax returns that can end up costing them a lot of money. Here, we're going to take a brief look at the IRS mileage rate for business, charity, and medical businesses in an attempt to help you complete your next tax returns as accurately as possible.
Importantly, the information revealed for the 2017 mileage rates should not be used for you 2016 returns. Instead, they should only be used for the miles travelled during 2017.
Understanding the IRS Mileage Rate for Business, Charity, Medical Companies:
As of 2017, the IRS or Internal Revenue Service, issued the optional mileage rates for the year that can be used to help you calculate what kind of deductible costs you can claim when it comes to operating and owning a separate vehicle for business purposes. These mileage rules apply on a yearly basis, and can also be applied to businesses that are used for moving purposes.
The rates that are currently available for individuals that drive a van, car, pick-up or panel truck for business, charity, or medical purposes are:
– 14 cents a mile awarded to charitable driving purposes
– 17 cents a mile awarded to medical or moving driving purposes
– 53.5 cents a mile awarded to every mile driven for business
Many of the allowances have gone down since 2016, however the allowed deductibles have remained the same for charity-based miles.
How These Rates Are Calculated:
The standard mileage rate that is offered for businesses calculating the deductible expenses for using their vehicle as a business tool is based on an annual consideration of the fixed and variable costs that are associated with operating a vehicle regularly. Crucially, the rate that is offered for using moving and medical vehicles is also based on a selection of variable costs, and taxpayers will have an opportunity to calculate the costs of actually running their vehicle if they feel that the standard mileage rates are unfair or inaccurate.
One important aspect to remember when it comes to understanding mileage rates for businesses, charities, and medical companies, is that you cannot use the standard mileage rate to calculate your deductions after you have used another form of depreciation method included under the accelerated and modified cost recovery system. You will also not be able to use the standard mileage rate to claim your deductions if you have claimed a deduction from section 179 of the IRS tax return forms for your vehicle. If you are uncertain, it's best to check your options with the IRS.