The following summarizes the optional standard mileage rates for employees, self-employed individuals, or other taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.
Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be
- 55.5 cents per mile for business miles driven
- 23 cents per mile driven for medical or moving expenses
- 14 cents per mile driven in service to charitable organizations
- Taxpayers using the standard mileage rates must comply with Rev. Proc. 2010-51.
Notice 2012-01 contains the 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 maxiumum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
The rate increases to 55.5 cents a mile for all business miles driven during the year.
In recognition of gasoline price increases, the IRS made this special adjustment for the final months of 2012. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.
While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.
**Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
For additional information, please refer to Form 2106 instructions.