Standard Mileage Rates Drop for 2014
The Internal Revenue Service has released the 2014 optional standard mileage rates that are 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
This is a 0.5 cent decrease from the 2013 rate for business, medical and moving expenses. The rate for miles driven for charitable purposes is determined by statute and is not adjusted annually for inflation.
The standard mileage rate is a simplified method for computing the deductible costs of operating your car for business.
If you use the standard mileage rate to calculate your car expenses, you need to keep records of the number of miles driven and the business purpose of the trip. The standard mileage rate includes almost all the your vehicle costs, such as maintenance and repairs, tires, gas, oil, insurance, and license and registration fees.
In contrast, the actual cost method requires receipts for all vehicle related expenses, as well as a computation of depreciation.
You always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. However, you do not always have the option of using the standard mileage rate. You can 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. Also, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.