Agribusiness BlogFarm CPA Today

Standard Mileage Rates Drop Again

With lower fuel prices, the standard mileage rates for business, medical and moving purposes has decreased again for the upcoming 2017 tax year.

Beginning Jan. 1, 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.

The amount for charitable mileage is set by law and did not change.

Taxpayers also have the option of deducting actual costs of using the vehicle rather than the standard mileage rates including fuel, maintenance, insurance, deprecation, etc. However, you can never use both the standard rates and actual costs. Also, the standard rate cannot be used for more than four vehicles simultaneously.

The standard rates are easier to calculate and if you use an older vehicle, may provide a greater deduction than actual costs.  However, it is very important to keep a detailed log in the event of an IRS audit.  It is best to document the following:

  • The date of your trip
  • Your starting point
  • Your destination
  • The purpose of your trip
  • Your vehicle’s starting mileage
  • Your vehicle’s ending mileage
  • Tolls or other trip-related costs

You can keep a mileage log in a notebook and update it by hand, or use a spreadsheet to continuously track your mileage. You can also use a mileage-tracking app. The key is to update your records regularly to ensure that they’re precise.

Special thanks to David Enquist for writing this post.

  • Principal
  • CliftonLarsonAllen
  • Yakima, Washington
  • 509-823-2920

Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a partner with CliftonLarsonAllen in Yakima, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. In fact, Paul drives combine each summer for his cousins and that is what he considers a vacation. Leave a comment for Paul. If you would like to leave a comment for Paul, follow the link above, however, please make sure to include your email address so that he can reply to your comment (your email address will not automatically show up).

Comments

Do you know the depreciation portion (in cents per mile) of the 53.5? Last year it was 24 cents per mile. Thanks!

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