The Internal Revenue Service has issued their 2018 standard mileage rates used to calculate the deductible costs of operating your food truck or other vehicles for your food truck business. As of Jan. 1, 2018, the 2018 standard mileage rates for the use of a car or step van for business will be…
2018 Standard Mileage Rates For Food Trucks
- 54.5 cents per mile for business miles driven, up from 53.5 cents for 2017.
The optional standard mileage rates for business use of a vehicle will increase slightly in 2018, after decreasing in the two previous years, the IRS announced in Notice 2018-3.
The business mileage rate decreased half a cent per mile from 2017. The 2018 standard mileage rate for business is based on an annual study of the fixed and variable costs of operating a vehicle.
To compute the allowance under a fixed and variable rate (FAVR) plan, the maximum standard automobile cost is $27,300 for 2018 (down from $27,900 for 2017) for automobiles (not including trucks and vans) and $31,000 for trucks and vans (a decrease of $300 from 2017).
2018 Fuel Prices
Food truck owners will be digging a bit deeper for the second straight year as the yearly national average will rise 19 cents versus last year to $2.57 per gallon, the highest since 2014, according to the 2018 Fuel Price Outlook released by GasBuddy.
Some highlights from GasBuddy’s 2018 Fuel Price Outlook include:
- The nation’s yearly gasoline bill will rise to $364.6 billion dollars. This is some $25 billion higher than what motorists spent last year. The average household sees their yearly gasoline bill rise to $1,898, up from $1,765 in 2017.
- GasBuddy’s forecast does not expect any record-breaking prices to be set in 2018. Most of the country will see prices peak under $3 per gallon. Please note that unexpected disruptions could push the national average close to $3.
- Metro areas including Chicago, Los Angeles, New York City, Sacramento, San Francisco, Seattle, and Washington D.C. will likely see prices eclipse $3 per gallon. Cities such as Cleveland, Detroit, Miami, Minneapolis, Orlando, St. Louis and Tampa may get within arm’s reach of such prices.
Taxpayers also 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 2018 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.
The Bottom Line
These and other requirements are described in Rev. Proc. 2010-51. Notice 2018-03, posted on IRS.gov, contains the standard mileage rates. These are the amounts a taxpayer must use in calculating reductions. It also includes the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
If you have any additional questions relating to the 2018 standard mileage rate, speak with your accountant.