IRS mileage rates for 2014

The Internal Revenue Service today issued the 2014 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, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) 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 organizations The business, medical, and moving expense rates decrease one-half cent from the 2013 rates. The charitable rate is based on statute. 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 2013-80 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. Remember that the IRS requires a mileage log that includes where you drove, why you went there, the business purpose and the miles. In the event of an audit the IRS also wants to see repair receipts, oil changes or smog certificates that show the odometer readings. The IRS calls this third party verification of the miles the car traveled. You don't want your mileage log to show you drove 15,000 miles and the third party verification shows 10,000 miles for the year. Any questions or more information please call KatTax at 702-796-1040