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IRS Mileage Rates for 2017 Announced – with Minor Decreases

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The Internal Revenue Service (IRS) recently unveiled the official standard mileage rates for 2017, showing slight decreases from the previous year. These rates apply to the use of a vehicle for various purposes.

For 2017, the IRS mileage rates are as follows:
– 53.5 cents per mile for business miles driven, down from 54 cents in 2016
– 17 cents per mile for medical or moving purposes, a decrease from 19 cents in 2016
– 14 cents per mile for driving in service of charitable organizations

These rates are effective starting January 1, 2017. The decrease in rates was attributed to various factors, including the drop in oil prices.

Business owners or employees who use their personal vehicles for work have two options for mileage tracking: utilizing the standard mileage rate (SMR) or tracking actual expenses. The choice depends on factors like the type of vehicle and record-keeping preferences. It’s essential to keep detailed records to ensure accurate deductions.

In terms of reimbursing employees for mileage, while employers are not required to reimburse for business miles, most choose to do so. Reimbursements can be made via an accountable plan, allowing for a business deduction. Employees should refer to their employer’s reimbursement policy for guidance.

Other mileage rate tips include using the correct rates for the tax year being filed and being aware of any mid-year adjustments made by the IRS based on gas price fluctuations.

Overall, staying informed about mileage rates and reimbursement policies is crucial for both employers and employees to ensure compliance with IRS guidelines and maximize deductions.

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