Today we will address changes in the standard mileage rate for 2018 and information concerning withholding tables for 2018.
The IRS has issued the 2018 standard mileage rates. These are used to calculate the deductible costs of operating a vehicle for business, charitable, and medical purposes.
Beginning on January 1, 2018, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
54.5 cents per mile for business miles driven, which is an increase of 1 cent from the 2017 rate.
18 cents per mile driven for medical purposes, which is an increase of 1 cent from the 2017 rate.
14 cents per mile driven for service in a charitable organization, which didn’t change from 2017.
Taxpayers also have the option of calculating and deducting the actual costs of using their vehicle rather than using the standard mileage rate.
The standard mileage rate is not available for use with any vehicle that has previously been depreciated under an accelerated depreciation system or after claiming a Section 179 deduction for that vehicle.
The IRS recently acknowledged that several forms and publications, including the 2018 federal withholding tables, will be issued later than in recent years due to the enactment of tax reform.
The tax reform bill includes changes to the income tax rates, the standard deduction, and personal exemptions, effective for tax years beginning after December 31, 2017, so the withholding tables will need to be substantially revised.
They noted that with the new tax rates that will take effect on January 1, 2018, it will take some time to issue the 2018 withholding tables as the IRS will need time to analyze all of the changes in the new legislation. As a result, employers will need to continue using the 2017 federal withholding tax tables until sometime in early 2018.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein