IRS mileage rate change for 2017

December 15, 2016

Effective January 1, 2017, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 53.5 cents per mile for business miles driven
  • 17 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The new mileage rates are applicable to expenses incurred on or after January 1, 2017.

EMS (iExpense) will be updated for the standard mileage rate of 53.5 cents per mile for business travel.

Background:
Reimbursement for the expense of using a personal automobile for business purposes is not taxable to the individual (employee or individual contractor) if the expense is substantiated with appropriate documentation.  In lieu of calculating the actual expense and submitting supporting documentation for the actual expense of operating a personal automobile, the standard business mileage rate established by the IRS may be used (in which case, only the business mileage must be documented). 

Reimbursement based on a mileage rate in excess of the IRS standard business mileage rate is considered income that is subject to the usual withholding and reporting rules.  (Note:  The standard mileage rate is intended to cover the fixed and variable costs of using an automobile for business purposes (including insurance, gasoline, maintenance)).  In addition to the standard mileage rate, an individual who uses the car for business purposes may also request reimbursement for parking fees and tolls incurred while using his automobile for business.)

For your reference, below is a link to Standard Mileage Rates for 2017 and IRS Revenue Procedure 2010-51 which provides an overview of the standard mileage rates:

https://www.irs.gov/uac/2017-standard-mileage-rates-for-business-and-medical-and-moving-announced

http://www.irs.gov/irb/2010-51_IRB/ar14.html