Today the IRS adjusted the standard mileage rate deduction for 2017 to 53.5 cents from 2016’s 54 cents. Lower fuel prices were the principal driver behind the adjustment.
The mileage rate for medical and moving also dropped to 17 cents from 19 cents in 2016, while the rate to deduct for mileage on behalf of a charitable organization is 14 cents in 2017.
Fixed and variable rate (FAVR) plans will use $27,900 for the maximum standard automobile cost in 2017, which id down from $28,000 in 2016. Trucks and vans saw an increase in the FAVR rate to $31,300 up from $31,000 in 2016. FAVR plans treat 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. Use of the standard amount avoids taxation to the employee but allows deductibility for the employer.
Employee should submit for their 2016 reimbursements for mileage separately from 2017 miles to avoid delays in payment.
For more detail please refer to the IRS Notice 2016-79. https://www.irs.gov/pub/irs-drop/n-16-79.pdf