Calling all commuters! The IRS recently announced the 2018 “standard mileage rates”. Whenever you drive for business, medical reasons, or in support of a charitable organization, you may be able to get a mileage deduction and save money on your taxes.
Beginning on January 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 54.5 cents per mile for business miles driven, up from 53.5 cents in 2017
- 18 cents per mile driven for medical purposes, up from 17 cents in 2017
- 14 cents per mile driven in service of charitable organizations
The standard mileage rate for a business is based on an annual study of the fixed and variable costs of operating an automobile, and the rate for medical purposes is based on the variable costs.
In general, you can only claim the deduction if you use your personal vehicle for your business, medical, or charitable purposes. For example, if you use a vehicle that was purchased by a business you cannot claim business mileage.
*New, for 2018, under the new tax reform law, you can no longer deduct moving expenses unless you are active duty military so the standard mileage rate for moving is not included.
Here’s a breakdown of what is covered for each:
With business mileage, your commute to your regular place of business cannot be deducted when you’re an employee. If you are self-employed any driving you do directly related to your business, like meeting with a client or going to a networking event, may be deductible business mileage. If you were an employee in 2017 and had unreimbursed expenses for driving somewhere for work outside of your regular office, then you can take the standard mileage deduction on your 2017 taxes. However, for 2018 under the new tax law, miscellaneous expenses like unreimbursed mileage cannot be deducted for tax year 2018 (the taxes you file in 2018) through Dec. 31, 2025.
Good news! You can claim medical miles for those that you drive to receive medical care, which includes you, your spouse, or your children. The amount of this deduction is added to your medical deduction, which means it will only be included if your total medical expenses exceed 7.5% of your adjusted gross income and you can itemize your tax deductions.
You can also claim charitable mileage for the driving you do in service of a recognized 501 (c)(3) charitable organization. Another good reason to volunteer your time!
Come tax time, don’t worry about knowing these tax rules. TurboTax will ask you simple questions and give you the tax deductions and credits you are eligible for based on your answers. If you have questions, you can also connect live via one-way video to a TurboTax Live CPA or Enrolled Agent to get your tax questions answered. The TurboTax Live CPA or Enrolled Agent can also review, sign, and file your tax return.