Standard Mileage Rates for 2017 Announced

12/15/2016

The optional standard mileage rates for business use of a vehicle will drop slightly in 2017, the second
consecutive annual decline, the IRS announced Thursday (Notice 2017-79). For business use of a car, van, pickup truck, or panel truck, the rate for 2017 will be 53.5
cents per mile, down from 54 cents per mile in 2016. Taxpayers can use the optional standard mileage rates to
calculate the deductible costs of operating an automobile.


Driving for medical or moving purposes may be deducted at 17 cents per mile, which is two cents lower than
for 2016. The rate for service to a charitable organization is unchanged, set by statute at 14 cents per mile
(Sec. 170(i)).


The portion of the business standard mileage rate that is treated as depreciation will be 25 cents per mile for
2017, one cent higher than for 2016.


To compute the allowance under a fixed and variable rate (FAVR) plan, the maximum standard automobile
cost is $27,900 for 2017 (down from $28,000 for 2016) for automobiles (not including trucks and vans) and
$31,300 for trucks and vans (an increase of $300 from 2016). Under a FAVR plan, a standard amount is
deemed substantiated for an employer’s reimbursement to employees for expenses they incur in driving their
vehicle in performing services as an employee for the employer.

Tags: 2017, IRS, Mileage, Rates