Attention drivers, the 2017 standard mileage rates have been released. The IRS announced the rates today, which are used for determining the deduction for the costs of operating a vehicle for various business, charitable, moving, or medical reasons.

What are the changes for 2017?

Starting January 1st 2017, the standard mileage rates (for use of a car, van, pickup or panel truck) are:

• 53.5 cents for business miles driven (down from 54 cents per mile in 2016)
• 17 cents per mile driven for medical or moving purposes (down from 19 cents per mile in 2016)
• 14 cents per mile driven in service of charitable organizations (no change from 2016)

How are the rates calculated?

There are various factors that influence the standard mileage rates, including:

• Gas and oil prices (declining as of late)
• Insurance costs (rising as of late)
• The state of the economy
• The expected cost of typical wear and tear on a vehicle

Hence the rates are purposed to go over and above the amounts a consumer pays solely for gas.

How can I reduce my fuel consumption?

Looking for ways to save money and reduce fuel consumption? There are a few things you can do to make the most out of a tank of gas:

• Make a concerted effort to maintain a constant speed, as speeding up and slowing down frequently can severely lower your gas mileage. Cruise control can help!
• Stop speeding. For every 5 miles you drive over 60 miles per hour, you are reducing your fuel economy by potentially 7%.
• Though tempting, letting your car warm up for 10 minutes during the heart of winter can cost you $0.04 per minute ($2.80 per week of wasted gas).
• Consider a tune up—it can increase your mileage by 4%.
• Consider cleaning your car and removing extra cargo from both the vehicle and the roof rack. Extra weight can reduce your fuel economy as well.

Is the standard mileage rate the only way to gauge deductions?

No, taxpayers always have the option to claim deductions based on the actual costs of using a vehicle, as an alternative to using the standard mileage rates.

Questions on the standard mileage rates for 2017? Contact any member of our Tax Services Team.