What Does Reimbursement Rate Mean?
The reimbursement rate is the tax-deductible value for using a vehicle for business, medical, charitable, or moving purpose. The value for paying back vehicle usage is set by the Internal Revenue Service and is susceptible to change over time.
It is also known as the mileage reimbursement rate.
Insuranceopedia Explains Reimbursement Rate
The reimbursement rate is set after studying the costs of operating and maintaining vehicles. As of 2017, the reimbursement rate is set at:
- Business Travel: 53.5 cents per mile
- Medical or Moving: 17 cents per mile
- Charity-Related Travel: 14 cents per mile
A taxpayer can either rely on the standard reimbursement rate or calculate the actual cost of mileage for the tax deduction.