When you use a vehicle for a deductible purpose, you can deduct the associated costs. There are two ways to determine your deduction:
- Actual costs. This totals all of the actual costs—from parking fees and gas to repairs and registration fees—related to the deductible use of the car or truck.
- Standard mileage. This uses a per-mile rate published by the IRS to calculate the deductible use of the car or truck.
Most taxpayers opt to use the standard mileage method, simply because it’s easier to keep track of one number (miles) than to maintain records regarding the actual costs of gas, parking, and all the rest.
Keep in mind, however, that there isn’t just one standard mileage rate. The IRS publishes updated standard mileage rates every year, and there are a few different rates depending on the specific deductible use of the vehicle. The standard mileage rates for 2017 are:
- For business miles, 53.5¢ per mile
- For moving or medical miles, 17¢ per mile
- For charitable service, 14¢ per mile
The standard mileage rate for vehicle use for charitable organizations is set by statute, so it does not vary. The other two standard mileage rates do fluctuate from year to year, so make sure you’re using the most up-to-date numbers when calculating your deduction on your tax return. Or, if you have any questions, just call Taxation Solutions, Inc. We are your resource for tax help backed by 40 years of experience!