If you drive your personal vehicle for business or certain other purposes, you can deduct your actual costs or rely on an IRS-set mileage rate. The IRS announced the rates for 2018; the rates for business and medical/moving expenses are one penny more per mile than for 2017 (Notice 2018-3). The 2018 rates are:
- Business driving: 54.5 cents per mile
- Medical or moving expenses: 18 cents per mile
- Charitable: 14 cents per mile (this is a statutory rate that the IRS can’t change)
Those who drive their vehicle for business must reduce the basis of the vehicle by a deemed depreciation rate. This will impact gain or loss when disposing of the vehicle. The deemed depreciation rate for 2018 is 25 cents per mile, which is the same rate used for 2017 business driving.
Caution: The Tax Cuts and Jobs Act of 2017 was signed into law after the IRS released Notice 2018-3, and for all taxpayers other than members of the Armed Forces, the Act eliminates the deduction for moving expenses for 2018 through 2025.
Source : JK Lasser Posts >> Tax News