Optional standard mileage rates used to calculate the deductible costs of operating a vehicle for business charitable medical or moving purposes in 2014 were issued last month by the Internal Revenue Service. The standard rates for business moving and medical expense rates decreased one-half cent from 2013 for the use of a car van pickup or panel truck and beginning on January 1 2014 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
For business the standard mileage rate is based on an annual study of the fixed and variable costs of operating a vehicle. The medical and moving purposes rate is based on the variable costs only. Taxpayers have the option to choose to calculate the actual costs of using their vehicle rather than using the standard mileage rates.
If a taxpayer chooses to use another depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or by claiming a Section 179 deduction for that vehicle then the business standard mileage rate may not be used. Additionally the business standard mileage rate cannot be used for more than four automobiles simultaneously.
Requirements for taxpayers wishing to use a standard mileage rate to calculate the amount of a deductible business moving medical or charitable expense are found 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 vehicle cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
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