The new standard mileage rates for 2015 are now available.
The Internal Revenue Service today issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
- 57.5 cents per mile for business miles driven, up from 56 cents in 2014
- 23 cents per mile driven for medical or moving purposes, down half a cent from 2014
- 14 cents per mile driven in service of charitable organizations
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.
Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates.
It’s important to note, however, that a taxpayer cannot go from using actual expenses, including accelerated depreciation and the Section 179 deduction, to the standard mileage rate method. Also, the standard mileage rate is not available to fleet owners (more than four vehicles used simultaneously). Details on these and other special rules are in Revenue Procedure 2010-51, the instructions to Form 1040 and various online IRS publications including Publication 17, Your Federal Income Tax.
Besides the standard mileage rates, Notice 2014-79, posted today on IRS.gov, also includes the basis reduction amounts for those choosing the business standard mileage rate, as well as, the maximum standard automobile cost that may be used in computing an allowance under a fixed and variable rate plan.
Be reminded that while using the standard mileage rate is simpler, it still requires some record keeping. Proper documentation should be maintained including the date, the origin and destination of travel and the purpose of the trip. This documentation is required when answering the question related having a written record of the mileage claimed for tax return purposes.
For more information or assistance with standard mileage rates for 2015, feel free to contact me via the form below:
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