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IRS Mileage Rate 2018

IRS Mileage Rate 2018
They say, there are only two inevitable things in life - death and taxation. While there is no escape from the former, the impact of the latter can be mitigated through tax deductions, which you can claim for certain expenses and investments. In the USA, the rules regarding taxation are handled by the agency called Internal Revenue Service (IRS) which publishes notifications regarding changes in the tax structure each year.
Omkar Phatak
Last Updated: Jan 13, 2018
You are taxed on the basis of every penny you have earned in a year. The IRS sees to it that every one of your business or personal income sources is tracked and accounted for. There is no way you can completely escape from taxation, but you can certainly lessen the burden by making investments and claiming tax deductions.
Mileage Rates & Tax Deduction
According to IRS "the standard mileage rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes."
Personal travel related expenses are not tax deductible. To apply for this deduction, you need to have an accurate record of miles you have actually traveled. You can provide an estimate of total travel expenses in the form of fuel bills or claim the deductions on the basis of mileage rates provided by IRS.
It specifies the deduction provided per mile for business, charity, medical or moving related travel. The vehicles include car, van, pickup, delivery truck.

After the brief overview of the rules about travel related tax reductions, here is the information on new rates in 2018 issued by the IRA in their latest circular which is effective from January 1, 2018.
For Business Travel
For every mile of business related travel, you can claim reimbursement at the rate of 54.5 cents per mile in 2018 as compared to 53.5 cents per mile in 2017. So a business can expect to gain a marginally greater benefit through travel related tax deductions.
For Charity Related Travel
For any kind of charity related travel, the rate for 2018 remains the same as that in 2017. For every mile of charity related travel, you can claim a tax deduction of 14 cents.
For Medical / Moving Related Travel
For every mile of medical or moving related travel, you can claim 18 cents of tax deduction in the next year, which is one cent higher from the rate of 2017.
It is observed that the business mileage rate and the medical and moving expense rates each have seen an increase of 1 cent per mile from the rates of 2017. The charitable rate, however, remains the same.
One is not eligible for mileage rate based deduction if he/she has already claimed business travel related deductions under 'Modified Accelerated Cost Recovery System (MACRS)'. Also, if deduction under section 179 for a vehicle is already claimed, then one is no longer eligible for this travel related tax deduction.
As per IRS standards, 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.
Check with a qualified tax consultant for more details regarding IRS mileage reimbursement rules. However, for more details about the travel related tax deductions, the best source of information is IRS website itself.
You will find detailed information regarding any aspect of taxation on this website. Note down the above new rates for business, charity, medical or moving related travel, to get an accurate estimate of the amount of deductions you can claim for.