The IRS just released its standard
mileage rates for 2013, which show slight increases from the current 2012
rates. These rates are made available so that employees, self-employed
individuals, and other taxpayers can calculate their tax-deductible transportation
costs for business, charitable, medical or moving purposes.
The 2013 standard mileage rates are set at 56.5 cents per mile for
business transportation or travel, 24 cents per mile for medical care, and 14
cents per mile for charity purposes. The 2012 rates are 55.5 cents per mile for
business transportation or travel, 23 cents per mile for medical care, and the
rate for charity purposes stayed the same at 14 cents per mile.
The new rates will take effect on January 1, 2013.
These rates don’t necessarily reflect what a company has to pay
their employees for these types of errands. However, employees and
self-employed workers can use these numbers to calculate their approximate
transportation costs and deduct them for tax purposes.
As always, taxpayers can choose to calculate the actual costs of
using their vehicle for these purposes and deduct that amount rather than using
the IRS’s standard mileage rates.
For businesses that reimburse their employees for transportation
costs, rates can be lower than the IRS’s standard mileage rates, and then
employees can simply deduct the difference.
The only way companies can pay their employees more than the
standard rates is if the actual costs add up to more than those rates and the
employee provides records of those costs. Additional items such as tolls and
parking can be taken into account when calculating the actual cost of
The standard rates usually stay the same throughout the year,
but in 2011 the IRS updated the business travel
rates mid-year to
reflect the increase in gas prices. The standard mileage rates are based on an
annual study of both fixed and variable automobile transportation costs.
If you have further questions regarding
your tax situation for 2012 or 2013, please don’t hesitate to contact us at
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.