Beginning on Jan. 1, 2014, the standard mileage rates will be:
- 56 cents per mile for business miles driven
- 23.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organization
An annual study is conducted to determine the standard mileage rate for businesses. The study examines fixed and variable costs of operating a vehicle. The rate for medical and moving purposes is based on the variable costs.
While more cumbersome, taxpayers also have the option of calculating the actual costs of using their vehicle. If you are in an industry which requires higher car & truck expense, this method may be worth the additional time.
There are additional restrictions with the standard mileage rates. Taxpayers 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, if you have more than four autos being used, the business standard mileage rate cannot be used simultaneously.
For more information see:
Rev. Proc. 2010-51 – requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense
Notice 2013-80 – standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
