Tax bill's $10,000 deduction cap to include state and local income and sales taxes, too
Highlights of the GOP tax bill that's about to become law

Mileage tax deduction rates for 2018 bumped up a bit

The Internal Revenue Service has good news for folks who do tax-related driving. Some auto travel amounts, however, might not matter depending on what happens with tax reform.

50 cent driving away giphy50 Cent via

If your job requires you to be on the road, you'll get a bit bigger tax break for those business miles in 2018.

The Internal Revenue Service's annual adjustment of the optional standard mileage rate for business use of your vehicle is a penny-per-mile more next year.

The deductible per-mile rate for medical and moving also are one cent higher in 2018.

The driving deduction rate for charitable travel, however, doesn't change. It never does. It's stuck at 14 cents per mile. That amount is set by Congressional statute and is not affected by the IRS' annual analysis of vehicular travel.

The table below illustrates which rates apply to this and next year's tax-related travel.

2017 & 2018 standard mileage deduction rates
allowed on cents-per-mile basis
Tax Year
Business Medical Moving Charity
2017 53.5    17 17 14
2018 54.5 18 18 14


Potential tax reform effects: Before you get too excited (or as excited as you can) about an added penny to 2018 mileage deduction claims, remember that they could be affected by tax reform legislation making its way through Congress as I type.

Business mileage will still be allowed, much to the relief of the millions of self-employed taxpayers who claim their work-related travel on Schedule C.

But if you're a company employee and claim unreimbursed mileage among your other business expenses in the Miscellaneous section of Schedule A, these rates won't matter. That deduction, which admittedly is hard for most folks to claim anyway since it requires you exceed a 2 percent threshold, is axed under the House and Senate tax plans.

The tax change news so far, however, is good for folks who drive in connection with a charity or for medical treatments.

It looks like for now, despite some tweaks reportedly still being made to the proposed tax bill this morning, the itemized deductions for charitable and medical miles will remain.

Of course, these changes in both the mileage rates and the overall Internal Revenue Code won't affect our filing until we send in our 1040 forms for the 2018 tax year in 2019. That gives us time to sort out the effects and how the per-mile deductions might apply.

Why the mileage rate differences? While a penny increase is small, the increase for 2018 at least breaks a two-year stretch in which the standard optional deduction amounts went down.

The optional standard mileage rates, aside from the one set for charitable travel, are based on annual studies of the fixed and variable costs of operating a vehicle.

The biggest fixed automotive cost is the vehicle price. The biggest variable cost is gasoline.

The rate for business road travel is based on the both the vehicle's fixed and variable costs.

The rate for medical and moving purposes, on the other hand, is based only on the variable costs.

Rates are optional: Note, too, the rate change's title: optional standard mileage rates.

You have a choice in most cases of how to deduct your allowable driving.

You can use these rates set annually by the IRS. Or, when your driving is for business, you can deduct your actual automotive costs.

While computing the actual cost of using your auto to do business could provide you with a bigger write-off, it does mean more work.

And, notes the IRS, you cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

Plus, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

Confused? Don't worry. Your tax preparer or software can help.

But regardless whether you come to your mileage deduction decision on your own or with help, you do need to run an at least down-and-dirty comparison to make sure you use the one that provides the best tax break.

Hitting the inflation highway: The annual mileage rate tweaks the IRS announced this week technically aren't part of the agency's overall inflation adjustments that are put out in two major announcements generally each fall.

When those were issued back in mid-October, I started the ol' blog's annual taxes and inflation series.

But the mileage rate adjustments merge nicely into that changing tax amounts roadway. So they earn the final spot in the 10-part inflation series, closing it out for the 2017 tax year, as well as the rapidly approaching 2018.

This look at changes to standard optional mileage rates
is Part 10 of the ol' blog's series on 2018 inflation adjustments.
You can find links to all 2018 inflation posts in the first item:
Income Tax Brackets and Rates.
Note: The 2018 figures apply to 2018 tax returns that are due in 2019.
For comparison purposes, you'll also find in this post the 2017 amounts
to be used 
in filing 2017 tax returns due next April.

You also might find these items of interest:




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So I am a sales rep and gas in not reimbursed by company supposed to be a tax write off. I seen that it will not be this year what is the law that was passed that prevents w2s from getting that or a place to find it to show my boss the new law

Damon Dillard

Hello Kay

Thank you for your sage comments regarding the changes specifically to the under-reimbursed expenses for 2018

In years previous - I have always been able to claim the difference between say $.25 a mile my employer pays me and the $.50ish the fed allows me to deduct

As I gather from previous comments, that deduction is gone ? if so, are there any options?

I am required by employer to purchase my own vehicle and get a fixed and variable reimbursement

Can I now use depreciation instead of mileage ?

Damon in Missouri

Jennett Robinson

Hello, I volunteer at our church almost daily. Lenght of time that I am there varies from a few minutes to several hours. The drive to the church is 12 blocks round trip. Then some days I take clothes from the church to other nonprofit organizations like the Goodwill, Sienna Francis House, Omaha City Mission and other locations. There are times I will drive to pick up donations of clothes from individuals that are donating to our Closet at our church but they are unable to drive to bring the donation to us. I also drive to other groups and organizations to give brief meetings regarding our facility and what we have to offer to their community or group. I give tours, provide training and work with individuals that need community service hours required by the County Court Systems. Everything I do is strictly volunteer. I am on a very limited income and am ill often which prevents me from working full or part time hours at a normal job. Living on social security disability income is very difficult. It would be nice if the church closet could provide me with a refund of income on gas spent at least for my miles to and from church plus all the other times I am required to drive for different reasons to help the closet. Is this possible and if so what would that amount be?

Amber Juslen

Continuing on from my comment above. I know entertainment is no longer allowed, like if I am out with a friend an we chat about my business. But If I am meeting with a client for a business related thing and pay for his or her meal does that count. Or is that still considered entertainment? What if I am meeting with someone in my direct sales downline for training?

Kay Bell

Kevin, I'm presuming you deducted your mileage and related work costs as miscellaneous reimbursed business expenses on Schedule A. You 2017 filing is the last time you can use this. It will not be allowed on 2018 and subsequent returns. Kay

Kevin Adams

Hello! I am a traveling sales rep. I am also a company employee. I pay for my own gas all year. Using my own vehicle. I'm a w2 employee. Will I still be able to claim my mileage. Last year I drove over 40,000 miles. How will this affect me? Thank you.

james smith

I am a union boilermakers what will I be able to deduct next year

Kay Bell

Roger, let me make sure I get this straight. Your employer gives you say $1,000 to cover your work-related driving of your personal car. But when you file your return, you drove more than that allowance covered and claimed the excess miles as a miscellaneous itemized expense. In this case, you no longer can claim the excess miles since that deduction will not be on Schedule A in 2018 through 2025 (or longer if the tax law is extended). In this case, you need to talk with your employer about a bigger allowance. Also, just curious, is that mileage allowance taxable income, too? If you get more that could possibly nudge up your tax bill. Kay


Kay, Many company employees in the oilfield drive personal trucks and get a monthly vehicle allowance which is subtracted from business miles driven for year. What is changing for 2018 regarding business use of personal vehicle?
Should we go back to company owned trucks?

Kay Bell

Richard, if you are self-employed (a contractor on jobs), keep track and calculate the miles you can claim on Schedule C. However, if you are a company employee who typically writes off and used to write off business miles as an unreimbursed employee expense on Schedule A, you're out of luck as this deduction won't be on that form from 2018 through 2025, when the new tax laws are set to expire. Kay


I am a union electrician. My question is will I still be able to write off my travel expenses and mileage for looking for work and for working away from home? For the tax year 2018

Kay Bell

Amber, as a self-employed independent contractor you can still claim your business related travel on Schedule C. Meals, too, remain deductible at the 50 percent rate. Entertainment of clients, however, is no longer deductible beginning with the 2018 tax year. Kay

Amber Juslen

If I get a 1099 as an independent contractor, not and employee, can I still claim my mileage, also how do the new tax laws effect business related lunches I hold with potential recruits, or events where I feed clients or other independent contractors that I have recruited etc?

Kay Bell

Diane, As a statutory employee, your employer will treat you as an employee for Social Security and Medicare tax withholding purposes. However, you'll report your income (and pay the tax on it since it isn't withheld, just the SS/Medicare taxes; remember to file estimated taxes!) and allowable expenses on Schedule C (or Schedule C-EZ) that you'll file with your personal federal Form 1040. Your statutory employee status means that you aren't liable for self-employment tax that usually is filed with Schedule C by regular contractors. But like all contractors, you'll claim all your unreimbursed work expenses, including your allowable travel costs, on Schedule C. Tax software or a tax pro can help if you added questions. Thanks for reading! Kay


Independent adjusters being paid on W-2 as “statutory employee”... will I still be able to deduct my expenses that are unreimbursed expenses such as hotel, meals, gas, licensing, continuing education, software, tools, etc.? As I understand the reform a regular W-2 employee will be loosing the deductions of unreimbursed travel expenses in 2018, but I’m uncertain about the “statutory” employee. New to this field in 2017 and confused over allowable deductions moving forward to 2018. Thank you in advance for your response and help in clarity on this subject.

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