IRS Standard Mileage Rate 2017
Yesterday, the IRS made an update to the 2017 Standard Mileage Rate rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. This is very important for Uber drivers, Lyft drivers, Instacart drivers, Postmates drivers, and Amazon Flex drivers. The standard mileage rate deductions is a sizable deduction for these rideshare and delivery drivers.
For 2016, the Standard Mileage Rate was 54 cents. For 2017, the IRS has decided to lower it to 53.5 cents, down 0.5 cents from 2016.
Here is the announcement from IRS.gov:
Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
53.5 cents per mile for business miles driven, down from 54 cents for 2016
17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
14 cents per mile driven in service of charitable organizations
How Does This Affect my Rideshare Taxes for 2016?
This doesn’t change anything for Lyft drivers and Uber drivers current rideshare taxes. The standard mileage deduction for 2016 is still 54 cents and you should continue to use it for tax year 2016. The new standard mileage rate goes into effect in 2017.
Why was the Mileage Rate Lowered in 2017?
Lower gas prices in 2016 had an impact on the Standard Mileage rate. The standard mileage deduction is calculated from depreciation, maintenance cost and fuel costs. From the drop in the standard mileage rate, you can see that gas prices only had a small effect on the overall standard mileage rate.
How Will This Impact Lyft Drivers and Uber Drivers?
Lyft drivers and Uber drivers will have a reduced mileage deduction for 2017 by about 1 percent. This isn’t a large drop in your rideshare deductions compared to lower fuel prices in the last year. Gas prices has come down about 20% since last year.Have more questions about Uber or Lyft? Head on over to our Rideshare Driver Training Course!