The Internal Revenue Service today issued the 2013 optional standard mileage
rates used to calculate the deductible costs of operating an automobile for
business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2013, the standard mileage rates for the use of a car
(also vans, pickups or panel trucks) will be:
- 56.5 cents per mile for business miles driven
- 24 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable
organizations
The rate for business miles driven during 2013 increases 1 cent from the
2012 rate. The medical and moving rate is also up 1 cent per mile from
the 2012 rate.
The standard mileage rate for business is based on an annual study of the
fixed and variable costs of operating an automobile. The rate for medical and
moving purposes is based on the variable costs.
Taxpayers always 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 (MACRS) 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.
These and other requirements for a taxpayer to use a standard mileage rate
to calculate the amount of a deductible business, moving, medical, or
charitable expense are in Rev. Proc. 2010-51. Notice 2012-72 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 maximum standard automobile cost that a taxpayer may use in computing the
allowance under a fixed and variable rate plan.
IRS Issue N-2012-72 Notice information:
2013 Standard Mileage Rates
Notice 2012-72
SECTION 1. PURPOSE
This notice provides the optional 2013 standard mileage rates for taxpayers to
use in computing the deductible costs of operating an automobile for business,
charitable, medical, or moving expense purposes. This notice also provides the
amount taxpayers must use in calculating reductions to basis for depreciation
taken under the business standard mileage rate, and the maximum standard
automobile cost that may be used in computing the allowance under a fixed and
variable rate (FAVR) plan.
SECTION 2. BACKGROUND
Rev. Proc. 2010-51, 2010-51 I.R.B. 883, provides rules for computing the
deductible costs of operating an automobile for business, charitable, medical,
or moving expense purposes, and for substantiating, under § 274(d) of the
Internal Revenue Code and § 1.274-5 of the Income Tax Regulations, the amount
of ordinary and necessary business expenses of local transportation or travel
away from home. Taxpayers using the standard mileage rates must comply with
Rev. Proc. 2010-51. However, a taxpayer is not required to use the
substantiation methods described in Rev. Proc. 2010-51, but instead may
substantiate using actual allowable expense amounts if the taxpayer maintains
adequate records or other sufficient evidence.
An independent contractor conducts an annual study for the Internal Revenue
Service of the fixed and variable costs of operating an automobile to determine
the standard mileage rates for business, medical, and moving use reflected in
this notice. The standard mileage rate for charitable use is set by
§ 170(i).
SECTION 2. STANDARD MILEAGE RATES
The standard mileage rate for transportation or travel expenses is 56.5 cents
per mile for all miles of business use (business standard mileage rate). See
section 4 of Rev. Proc. 2010-51.
The standard mileage rate is 14 cents per mile for use of an automobile in
rendering gratuitous services to a charitable organization under § 170.
See section 5 of Rev. Proc. 2010-51.
The standard mileage rate is 24 cents per mile for use of an automobile (1) for
medical care described in § 213, or (2) as part of a move for which the
expenses are deductible under § 217. See section 5 of Rev. Proc. 2010-51.
SECTION 3. BASIS REDUCTION AMOUNT
For automobiles a taxpayer uses for business purposes, the portion of the
business standard mileage rate treated as depreciation is 21 cents per mile for
2009,
23 cents per mile for 2010, 22 cents per mile for
2011, 23 cents per mile for 2012, and 23 cents per mile for 2013. See section
4.04 of Rev. Proc. 2010-51.
SECTION 4. MAXIMUM STANDARD AUTOMOBILE COST
For purposes of computing the allowance under a FAVR plan, the standard
automobile cost may not exceed $28,100 for automobiles (excluding trucks and
vans) or $29,900 for trucks and vans. See section 6.02(6) of Rev. Proc.
2010-51.
SECTION 5. EFFECTIVE DATE
This notice is effective for (1) deductible transportation expenses paid or
incurred on or after January 1, 2013, and (2) mileage allowances or reimbursements
paid to an employee or to a charitable volunteer (a) on or after January 1,
2013, and (b) for transportation expenses the employee or charitable volunteer
pays or incurs on or after January 1, 2013.
SECTION 6. EFFECT ON OTHER DOCUMENTS
Notice 2012-1 is superseded.
DRAFTING INFORMATION
The principal author of this notice is Bernard P. Harvey of the Office of
Associate Chief Counsel (Income Tax and Accounting). For further information on
this notice contact Bernard P. Harvey on (202) 622-4930 (not a toll-free call).
Questions? We are your financial partners, and we are here to help. Give us a call today.
Security Tax Services LLC
2802 Wetmore Ave, Suite 212 33530 1st Way S, Suite 102
Everett, WA 98201 Federal Way, WA 98003
425.339.2400 253.237.0751
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