IRS ISSUES STANDARD BUSINESS MILEAGE DEDUCTION RATE FOR 2014:

The Internal Revenue Service last week issued the 2014 optional standard mileage rates used to calculate the deductible costs of operating a vehicle for business, charitable, medical or moving purposes. Retroactive to January 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.

IMPORTANT! It is important to note that the business standard mileage rate for a vehicle is not available to any taxpayer 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 using the standard mileage can be found in IRS Rev. Proc. 2010-51.This revenue procedure 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 Rev Proc 2010-51 is available here: Notice 2013-80

GOT QUESTIONS? CONTACT Mark S. Morgan, Esq., PMAA Regulatory Counsel
(202) 364-6767 or mmorgan@pmaa.org