Our nyc cpa office is pleased to provide guidance on the 2017 optional standard mileage rates to be used to calculate the deductible costs of operating an automobile for business, medical, moving and charitable purposes (IR-2016-169; Notice 2016-79, I.R.B. 2016-52). Beginning on January 1, 2017, the standard mileage rates for the use of a car, van, pickup of panel truck will be:

  • 53.5 cents per mile for business miles driven (down from 54 cents in 2016);
  • 17 cents per mile for medical and moving expenses (down from 19 cents in 2016); and
  • 14 cents per mile for miles driven for charitable purposes (permanently set by statute at 14 cents).

As our nyc tax office advises, taxpayers using the optional standard rates must comply with Rev. Rul. 2010-51. Proper use of the business standard mileage rate is optional and takes the place of all operating and fixed costs of the automobile allocable to business use, such as depreciation, maintenance and repairs, tires, gasoline, oil, insurance, and license and registration fees.

A taxpayer may not use the business standard mileage rate after using a depreciation method under Code Sec. 168 or after claiming the Code Sec. 179 deduction for that vehicle. A taxpayer may not use the business rate for more than four vehicles at a time.

For automobiles used for business, a taxpayer must use 23 cents per mile as the portion of the standard mileage rate treated as depreciation for 2017. For prior years, these amounts are 24 cents for 2016 and 2015; 22 cents for 2014; and 23 cents for both 2012 and 2013. These amounts are used to calculate basis reductions for depreciation taken under the standard mileage rate. To compute the allowance under a fixed and variable rate plan for 2017, the standard automobile cost may not exceed $27,900 for cars or $31,300 for trucks and vans (down from $28,000 for cars for 2016 but up slightly for trucks and vans from $31,000 for 2016).

If you have questions about 2017 tax rates or 2017 tax due dates, please contact our nyc cpa office for details.