2018 Federal Mileage Rate Increases from 2017
Did you know the majority of business travel is done by car? According to the Bureau of Transportation, the personal vehicle is the dominant travel mode for business travel, comprising 81% of all trips. This means most business travelers will be submitting mileage expenses at some point and will need to know the new IRS mileage rate.
Today, the Internal Revenue Service (IRS) announced the 2018 federal mileage deduction rate of 54.5¢, which goes into effect Jan. 1, 2018. The rate was determined by the IRS in working with Runzheimer, the leading business vehicle technology and solutions provider.
The 2018 IRS Mileage Rate represents a 1 cent increase from the current 2017 rate of 53.5 cents-per-mile.
“Across the US the average costs of owning and operating a vehicle rose just one cent over the last reporting period for this cost analysis. All of the ownership and operating costs have been relatively stable, with fuel costs showing the greatest increase, offset by small decreases in vehicle ownership costs,” said Donna Koppensteiner-Reidy, Senior Vice President of Business Development and Marketing at Runzheimer.
Are you wondering how the IRS mileage deduction is calculated? Since 1980, the IRS has worked with Runzheimer to calculate the business mileage deduction rate, using a consistent method and statistical analysis of vehicle cost components. Using detailed data from across the nation, the rate measures auto insurance premiums, maintenance costs, vehicle depreciation, fuel and other costs that reflect the movement of prices in the marketplace.
According to Mike Bassi, Director of Strategic Partnerships at Runzheimer, “The one penny increase in the business mileage deduction rate for 2018 reflects fixed and operating costs across the country. Fuel prices represent a large portion of those costs, and they increased over the reporting period. The rest of the costs have been relatively stable, with a small decrease in some of the fixed costs. The IRS posts this rate to make it very easy for the taxpayer to take an expense deduction for unreimbursed business expenses.”
U.S. taxpayers and companies can deduct this new standard mileage rate amount on their 2018 tax return for recorded business miles in a personal vehicle.
For more information about Runzheimer’s IRS-compliant, business vehicle reimbursement solutions, please visit https://www.runzheimer.com.
Business Travel Life
Business Travel Life is an online resource for business travelers. Business Travel Life covers business travel tips and trends, healthy travel, travel accessories, hotel workouts and topics that matter to travelers. Business Travel Life supports business travelers and road warrior who want to get in and stay in shape. We provide travel workout programs for business travelers, accessible online using our app. Our goal is to make business travel healthier and healthy business travel easier.