The IRS has released the optional standard mileage rates that taxpayers can use in 2012 to figure the deductible costs of operating a vehicle for business, charitable, moving or medical purposes. For the most part they have not changed a great deal.
The standard mileage rates for using a car, van, pickup or panel truck will be 55.5 cents per mile for business miles driven, 23 cents per mile driven for medical or moving purposes or 14 cents per mile driven for charitable purposes. The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.
The business rate can be used by employers to reimburse tax-free employees who supply their own autos for business use and to value personal use of certain low-cost employer provided vehicles. The reimbursement is treated as a tax-free accountable plan reimbursement if the employee substantiates the time, place, business purpose and mileage of each trip.
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 business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System 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.
Contact an MCB Tax Adviser for your tax and accounting needs at 703.218.3600 or at firstname.lastname@example.org.