The Internal Revenue Service (IRS) has issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
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Beginning on January 1, 2017, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:
- 53.5 cents per mile for business miles driven, down from 54 cents for 2016;
- 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016;
- 14 cents per mile driven in service of charitable organizations (no change).
The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged. 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.
The use of standard mileage rates is optional; individuals always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
IRS Notice 2016-79, released on December 13, 2016, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.