The IRS has issued the 2018 optional standard mileage rates and starting on January 1, 2018, the standard mileage rates for the use of a car, van, pickup or panel truck 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 or moving purposes (up from 17 cents in 2017)
14 cents per mile driven in service of charitable organizations (currently fixed by Congress)
25 cents per mile is the depreciation on the vehicle
These elective standard mileage rates above are used to calculate the amount of a deductible business, moving, medical or charitable expense (miles driven times the applicable rate). The rate for business is calculated using an annual study of the fixed and variable costs of operating an automobile, such as depreciation, insurance, repairs, tires, maintenance, gas and oil while the rate for medical and moving purposes is based on the variable costs, such as gas and oil.
To count the rates, simply multiply the standard mileage rates by the number of miles traveled. If you use your car for business and personal use, keep appropriate records and back out the cost of personal travel. To illustrate, total miles in 2017 is 25,000, including 10,000 for personal purposes, 5,000 for charity and 10,000 for business use. You would calculate deduction as bellow:
10,000 business miles x 0.54 = $5,400
5,000 charitable miles x 0.14 = $700
10,000 personal miles x 0 = 0
Thus, the total deductible mileage in terms of expenses would be $6,100 plus additional related charges like parking fees and tolls. Under current law, taxpayers have the option of deducting their actual expenses rather than using the standard mileage rates.