19 Dec IRS To Lower Standard Mileage Rates
The IRS has issued an option of using standard mileage rates to calculate costs associated with operating vehicles for business, charitable, medical, or moving purposes in order to calculate deductible costs, according to Jeff Stimpson from AccountingToday.com. Beginning January 1st, standard mileage rates for the use of cars, vanes, pickups, or panel trucks, will be 53.5 cents per mile (down from 54 cents per mile in 2016), 17 cents per mile for medical or moving purposes (down from 19 cents per mile in 2016), and 14 cents per mile driven in service of a charitable organization.
Accordingly, Donna Koppensteiner, senior vice president of business development for Runzheimer, claims that the drop in cents per mile was due to the declining fuel prices. Ironically enough however, such a drop was largely offset by rising vehicle insurance and vehicle maintenance costs.
Stimpson claims that the IRS reiterated the fact that using standard mileage rates is only an option and taxpayers can choose the actual costs of using their vehicles rather than using the standard mileage rates. Stimpson states that “A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost recovery System (MACRS), or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.”
Thus, Stimpson states that these and other requirements that fall under Rev. Proc. 2010-51 Notice 2016-79 “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” along with the cost to taxpayers for computing the allowance under both a fixed and variable rate plan.