Are you a business owner that uses your personal vehicle for business purposes? Are you planning on moving in 2013? If so, Belfint Lyons & Shuman wants you to know that the IRS recently issued the new 2013 standard mileage rates. These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical and moving purposes.
New Mileage Rates
Starting on January 1, 2013, the new standard mileage rates for the use of a car, van, pickup or panel trucks will increase to the following rates:
- Business – The rate increases to 56.5 cents per mile driven for business purposes, a one cent increase over the 2012 mileage rates. This rate is based on an annual study of the fixed and variable costs of operating an automobile.
- Medical/Moving – The rate increases to 24 cents per mile driven for medical/moving purposes, a one cent increase over the 2012 mileage rates
- Charity – The rate increase to 14 cents per mile driven in service to charitable organizations, again a one cent increase over the 2012 mileage rates.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
It’s important to note there are limitations on how the standard mileage deduction rates may be used. A taxpayer is prohibited from using these rates on any vehicle that has been depreciated using the Modified Accelerated Cost Recovery System or after claiming a Section 179 deduction for a vehicle. Finally, the business standard mileage rate is not permitted to be used for more than four vehicles at the same time.
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.
Are you unsure if you standard mileage rates for your company’s vehicles are the best option? If so, then contact us today. For additional information on how to use the standard mileage rate information to calculate your deductible costs, please contact Belfint Lyons & Shuman at 302.225.0600, or click here to contact us. In a brief consultation we can determine how these new rates apply to your situation.