The new standard mileage rates that are in effect for tax year 2018 have been published in IRS publication Notice 2018-42. This notice modifies Notice 2018-03, 2018-2 I.R.B. 285 (released to the Public on December 14, 2017), in light of Public Law 115-97 (December 22, 2017), which made amendments to sections 66 and 217 of the Internal Revenue Code. Notice 2018-03 provided the optional 2018 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.
Section 3 of Notice 2018-03 identified a standard mileage rate of 54.5 cents per mile for all miles of business use business standard mileage rate) that taxpayers were to use, including to deduct unreimbursed employee travel expenses as a miscellaneous itemized deduction under section 67. Public law 115-97 (section 11045) suspend all miscellaneous itemized deductions that are subject to the two percent of adjusted gross income floor under section 67, including unreimbursed employee travel expenses. This suspension applies to taxable years beginning after December 31, 2017, and before January 1, 2026. Thus, the standard mileage rate listed in Notice 2018-03 cannot be used to claim an itemized deduction for unreimbursed employee travel expenses during the suspension. Notwithstanding the foregoing suspension of miscellaneious itemized deductions, deductions for expenses that are deductible in determining adjusted gross income are not suspended.
For example, members of a reserve component of the Armed Forces of the United States, state or local government officials paid on a fee basis, and certain performing artists are entitled to deduct unreimbursed employee travel expenses as an adjustment to total income online 24 of Form 1040 (2017), not as an itemized deduction on line 21 of Scedule A of form 1040, and therefore may continue to use the business standard mileage rate.
Section 5 of Notice 2018-03 identified a maximum standard mileage rate for automobiles of $27,300 for passenger automobiles and $31,000 for trucks and vans. If you need any help in determining whether you have calculated your deductions correctly, or if you owe the IRS, call 1-888-689-7861 for a free consultation today.