Standard Mileage Rates Increase Slightly for 2018

The IRS issued Notice 2018-3, updating optional standard mileage rates for business use of a vehicle. As of Jan. 1, 2018 the standard mileage rates for cars, vans pickups or panel trucks are as follows:

• 54.5 cents per mile for business miles driven (up from 53.5 cents per mile in 2017)
• 18 cents per mile for medical or moving purposes (a one cent increase)
• 14 cents per mile for miles driven in service of charitable organizations (remains unchanged)

To compute the allowance under a fixed and variable rate (FAVR) plan, the maximum standard automobile cost is $27,300 (down from $27,900 in 2017) for and $31,000 for trucks and vans (down from $31,300 in 2017). Under a FAVR plan, a standard amount is deemed substantiated for an employer's reimbursement to employees for expenses they incur in driving their vehicle in performing services as an employee for the employer.