If you have employees who travel, it’s time to pay attention because the standard mileage rates have changed for 2018. The IRS announced that business standard mileage rates for 2018 have increased to 54.5 cents per mile.
Tell me more.
The mileage rates for business travel are based on a study of the fixed and variable costs for operating an automobile. The change for 2018 is a 1 cent increase from last year’s rate of 53.5 cents per mile.
This is an important calculation to know if you’re reimbursing employees for driving on or for the job. While 1 cent may not sound like much, it can add up if you’re not paying attention. Plus, money paid to employees above the federal mileage rate becomes taxable wages to the employee.
The changes to the business standard mileage rate goes in effect on Jan. 1, 2018—so you need to be mindful of your years. If an employee files an expense report in 2018 for miles driven in 2017, the 2017 rules apply.
And one other thing.
The IRS also shared the love and changed the 2018 standard miles driving for medical or moving purposes. The 2018 rate will now be 18 cents per mile, up from 17 cents per mile in 2017.
The rate for operating a car for charity purposes remains unchanged at 14 cents per mile in 2018.
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