Reimbursement Rate

What Does Reimbursement Rate Mean?

The reimbursement rate is the tax-deductible value for using a vehicle for business, medical, charitable, or moving purposes. This rate, set by the Internal Revenue Service, may change over time.

It is also referred to as the mileage reimbursement rate.

Insuranceopedia Explains Reimbursement Rate

The reimbursement rate is set based on the costs of operating and maintaining vehicles. As of 2017, the reimbursement rates are:

• 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 use the standard reimbursement rate or calculate the actual cost of mileage for the tax deduction. Drivers who log business miles often run into a separate question at policy renewal time, since most personal auto policies exclude business use, and that gap is what commercial auto insurance is built to cover. This comes up often for rideshare drivers, who track high mileage for tax deductions and may also need rideshare insurance to stay covered while the app is on.