If you are looking for latest updates about 2018 IRS mileage rate, for business related travel, this article is just what you need to read.
Tax payments are our contribution to the national revenue. Taxation is tolerable, when it’s reasonable and in proportion to every individual’s earning. Designing of an elaborate taxation system is one of the major tasks of any government.
Tax deductions help reduce the burden of taxation by allowing for reimbursement on certain expenses and investments made by any citizen. In USA, the federal department, which oversees the taxation system and collection of revenue is the Internal Revenue Service (IRS).
The travel related IRS mileage reimbursement rate updates are the most awaited every year, as they form a sizable component of tax deductions. With the price of crude oil rising every year, the price of gasoline is always on an ascending curve.
For most business owners, travel related costs are quite high and if it weren’t for the tax deductions allowed for the clocked business miles, the burden would be quite heavy. The IRS decides the mileage reimbursement rates according to the current costs of gasoline and the condition of the economy as a whole.
Allowing for such tax deductions is one way of encouraging business to prosper and provide better services. Because of the mercurial nature of the crude oil market in the recent years , the IRS mileage reimbursement rates offered have also fluctuated substantially.
Eligibility Conditions For Claiming Business Travel Related Reimbursement
There are a couple of rules that one must know when calculating business travel related tax deductions.
One may either claim a tax deduction, based on a record of actual travel expenses or use the mileage rates. The latter option is advisable, if one hasn’t opted for a deduction under the Modified Accelerated Cost Recovery System (MACRS).
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)’. If deduction under section 179 for a vehicle is already claimed, then one is no longer eligible for this travel related tax deduction.
Also, mileage rate based deductions for business travel on a maximum of four vehicles can be claimed, which are in use simultaneously.
Business Mileage Rate For 2018
The standard business mileage reimbursement rate for 2018 will be 54.5 cents per mile. It was 53.5 cents per mile in 2017.
There are two ways in which deductions for business related travel can be claimed. Either one could go for itemized deduction, based on actual expenses for business travel or claim deductions according to the standard reimbursement of 54.5 cents per mile.
The deductions apply to strictly business related travel. It goes without saying that one needs to supply sound evidence in the form of documentation, if one hopes to take advantage of these tax deductions. For that, a detailed mileage expense account related to business travel must be maintained.
As discussed before the mileage rate for business travel has been raised by a cent. To conclude, in the year 2018, one can be reimbursed by 54.5 cents for every mile of business related travel.
Kindly visit the IRS website also for more details related to travel related tax deductions.