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
The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
Source: Internal Revenue Service
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An HSA (Health Savings Account) is a tax-advantaged savings account that is owned by an employee or self-employed person. The contributions and earnings can escape taxes when distributed if they go toward qualified medical expenses. So, if you have an HSA account and know in advance how much you will have in medical expenses, you can save that taxes.
The accounts are easy to set up and fund. The maximum contribution allowed for a family in 2016 is $ 6,750. If you are over 55, you can put an additional $1,000 into your HSA account.
Check if your HSA comes with investment options. HSAs accounts with investment options are a better choice for you.
Max, it Out to the point you can draw this money toward medical expenses. As you know, medical expenses are subject to an income limitation. The HSA, however, allows you to move a deduction for medical expenses from Schedule A to a deduction on the front of a Form 1040, so an HSA deduction will reduce your taxable income while medical expenses paid may not.
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