| 2017 Standard Mileage Rates | |
| Mileage | Rate/Mile |
| Business Travel | 53.5¢ |
| Medical/Moving | 17.0¢ |
| Charitable Work | 14.0¢ |
The standard mileage rates enable a taxpayer to deduct vehicle expenses on a per-mile basis rather than deducting actual car expenses that are incurred during the year. The rates vary, depending on the purpose of the transportation. Accordingly, the standard mileage rates differ from one another depending on whether the vehicle is used for:
- Business;
- Charitable purposes
- Obtaining medical care; or
- Relocating for employment.
Rather than using the optional standard mileage rates, however, a taxpayer may choose to take a deduction based on the actual costs of using the vehicle.
Business Use of a Taxpayer’s Personal Vehicle
A taxpayer may deduct unreimbursed employee expenses—including unreimbursed expenses related to business use of a personal vehicle—as “miscellaneous itemized deductions” to the extent the total of such expenses exceeds 2% of his or her AGI. In order for the expenses to be deductible, however, they must meet certain criteria. Thus, for expenses in connection with a vehicle’s business use to be deductible, such expenses must have been: Paid or incurred during the tax year;
For the purpose of carrying on the taxpayer’s trade or business of being an employee; and Ordinary and necessary. Provided the paid or incurred personal vehicle expenses meeting these three criteria are not reimbursed, the deductible personal vehicle expenses include those incurred while traveling:
- Between workplaces;
- To meet with a business customer;
- To attend a business meeting located away from the taxpayer’s regular workplace; or
- From the taxpayer’s home to a temporary place of work.
The 2017 alternative standard mileage rate applicable to deduction of eligible personal vehicle expenses incurred while the vehicle is being used in an employer’s business is 53.5¢ per mile, down from 54¢ in 2016. In addition to using the standard mileage rate, a taxpayer may also deduct any business-related parking fees and tolls paid while engaging in deductible business travel. However, parking fees paid by a taxpayer to park his or her vehicle at the usual place of business are considered commuting expenses and are not deductible.
Standard Business Mileage Deduction Not Permitted in Some Cases
The standard mileage rate deduction is unavailable in some cases. The situations in which the standard mileage rate for business transportation is unavailable to the taxpayer apply if the taxpayer: Uses five or more cars at the same time, such as in fleet operations; Claimed a depreciation deduction for the car using any method other than straight line depreciation; Claimed a §179 deduction on the car, i.e. an election to recover all or part of the cost of qualifying property by deducting it in the year placed in service; Claimed the special depreciation allowance on the car; Claimed actual car expenses after 1997 for a leased car; or Is a rural mail carrier who received a qualified reimbursement.
Use of a Personal Vehicle for Charitable Purposes
A taxpayer may deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of a personal vehicle in providing services to a charitable organization. Alternatively, a taxpayer may use the standard mileage rate applicable to the use of a personal vehicle for charitable purposes. The standard mileage rate applicable to a taxpayer’s use of a personal vehicle for charitable purposes is based on statute and remains unchanged from 2016 at 14¢ per mile. As in the case of other mileage deductions, the taxpayer may also deduct parking fees and tolls regardless of whether the actual expenses or standard mileage rate is used. A related issue involves a taxpayer’s travel expenses incurred in providing services to a charity. Thus, in addition, a taxpayer may generally claim a charitable contribution deduction for travel expenses necessarily incurred while away from home performing services for a charitable organization. In order to claim a charitable deduction for such travel expenses, however, certain criteria must be met. Pursuant to federal regulations, in order to take a charitable contribution deduction for such travel expenses: There must be no significant element of personal pleasure, recreation, or vacation in the travel; and The taxpayer must be on duty in a genuine and substantial sense throughout the trip. (A taxpayer having only nominal duties in connection with the trip or who has no duties for a significant part of it would not be permitted to deduct the travel expenses.)
Use of a Taxpayer’s Personal Vehicle to Obtain Medical Care
A taxpayer may also deduct medical and dental expenses to the extent they exceed (in the aggregate) the applicable percentage of his or her adjusted gross income (AGI). The AGI threshold that applies to taxpayers younger than age 65 is 10% beginning in 2013. The AGI threshold for taxpayers age 65 or older remains at 7.5% through 2016. Beginning in 2017, medical and dental expenses will be deductible, regardless of the age of the taxpayer, only if they exceed 10% of the taxpayer’s AGI.
The vehicle expenses a taxpayer may include as medical and dental expenses are the amounts paid for transportation to obtain medical care for the taxpayer, a spouse or a dependent. A taxpayer may also include as medical and dental expenses those transportation costs incurred: By a parent who must accompany a child needing medical care; By a nurse or other person who can administer injections, medications or other treatment required by a patient traveling to obtain medical care who is unable to travel alone; or For regular visits to see a mentally-ill dependent, if such visits are recommended as a part of the dependent’s treatment. A taxpayer who uses a personal vehicle for such medical reasons is permitted to include the out-ofpocket vehicle expenses incurred—the expenses for gas and oil, for example—or deduct medical travel expenses at the standard medical mileage rate. For 2017, the standard medical mileage rate is 17¢ per mile, a reduction of 2¢ from 2016. The taxpayer may also deduct any parking fees or tolls, regardless of whether actual expense or the standard mileage rate is used.
Use of a Taxpayer’s Personal Vehicle to Move
Many taxpayers change their residence each year, and many of those taxpayer relocations involve new jobs that can permit a taxpayer to deduct moving expenses by car. Thus, certain moving expenses incurred within one year of the date a taxpayer first reported to work at a new main job location—provided the new location is at least 50 miles farther from the taxpayer’s former home than the former main job location—may be deducted as an adjustment to gross income. The deductible moving expenses include the expenses of traveling to a new home, including transportation and lodging enroute. A taxpayer who uses his or her personal vehicle to transport the taxpayer, members of the taxpayer’s household or the taxpayer’s personal effects to a new home may deduct such costs, provided the move is eligible for the deduction of moving expenses. In addition to any parking fees and tolls paid, the taxpayer is permitted to deduct:
The actual vehicle expenses incurred, such as the expenses for gas and oil; or The standard mileage rate. Similar to the standard mileage deduction for medical transportation, the standard mileage rate applicable to moving expenses has been reduced 2¢ from 2016 and is 17¢ per mile in 2017