Standard IRS Mileage Rates for 2012
The IRS has retained the standard reimbursement rates for business and charitable miles in place since July 1, 2011, and slightly decreased the rates for medical and moving miles by 0.5 cents per mile. These new standard mileage rates are effective on January 1, 2012.
Eligible taxpayers have two options when calculating the deductible cost of operating a vehicle for business, charitable, or moving purposes. You can keep your own records of the actual cost or use the standard rates issued by the IRS, which apply to cars, vans, pickups, or panel trucks:
- 55.5 cents per business mile
- 23 cents per mile for medical or moving purposes
- 14 cents for each mile driven in service of charitable organizations (set by law)
However, taxpayers can’t use the business standard mileage rate if they:
- Use any depreciation under the Modified Accelerated Cost Recovery System (MACRS)
- Claim a Section 179 deduction for the vehicle
- Use the vehicle for hire, such as a taxi
- Use more than four vehicles simultaneously (as in fleet operations)
No change for fleet operations
The IRS decided to retain the ineligibility rule for fleet operations that own or lease more than four automobiles.
IRS Notice 2012-01 and Revenue Procedure 2010-51 provide more information on the 2012 standard mileage rates. Notice 2012-01 also addresses the amount a taxpayer must use in 2012 to calculate reductions to basis for depreciation taken under the business standard mileage rate (23 cents per mile), and the maximum standard automobile cost that a taxpayer may use to compute the allowance under a fixed and variable rate (FAVR) plan ($28,000 for automobiles; $29,300 for trucks and vans).
Sue Grupe, Tax Director
sgrupe@larsonallen.com or 612-376-4647View our tax principals.