Standard Mileage rates for 2018
The Internal Revenue Service has released the 2018 Mileage rates. Beginning January 1, 2018 the following are the IRS approved rates :
- Business Miles : 54.5 cents would be the business miles that would be permitted to be deducted on the tax return. This is 1 cent higher than the 2017 rates.
- Medical or moving expenses : 18 cents would be the standard rates that can be deducted on the tax return. This is 1 cent higher than 2017 rates.
- Charitable Organizations : 14 cents per charitable mile driven would be allowed as a deduction.
Example : If your total miles are 10,000 in 2018 out of which 5000 is for personal, 3000 for business, 1,000 for medical/moving expenses and 1000 for charity then below are the calculations ;
Business miles 3,000*0.545=$1,635
Medical miles 1,000*0.18=$180
Charity miles 1,000*0.14=$140
Total $ value of miles that you can deduct on the tax return would be $1,955.
Actual expenses : Under the new tax law, taxpayers can also deduct the actual expenses instead of using the standard mileage rates. The tax law allows you to deduct the maximum of either the standard business mileage or the actual expenses whichever is higher but not both.
Record keeping basics : For Miles, you need to ensure you keep track of total miles driven either with the help of a mileage log or by using mobile apps. The deduction may be disallowed if there is no relevant documentation available to claim the deduction.
For actual expenses, it is necessary to maintain the actual receipts of car expenses to claim the deduction.
Other publications : The Internal Revenue Service has published a detailed notice that has all the latest updates on the mileage deduction. You can access the link here Notice 2018-42
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