Yesterday, the IRS released its 2012 Standard Mileage Rates
The New Rates:
- The standard mileage rate for transportation or travel expenses is 55.5 cents per mile for all miles of business use (business standard mileage rate).
- The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170.
- The standard mileage rate is 23 cents per mile for use of an automobile (1) for medical care described in § 213, or (2) as part of a move for which the expenses are deductible under § 217.
The Standard Mileage Rates serve as a simple guideline for employers to reimburse employees who use their personal vehicle for work-related purposes. However, the IRS does not mandate that businesses reimburse their employees for vehicle use and a business may opt to reimburse at a rate much lower than that set Standard Mileage Rate. Companies may deduct these reimbursements as business expenses on tax returns. While the IRS certainly allows a business taxpayer to calculate and deduct the actual
cost of using a vehicle, the use of the IRS Standard Mileage Rates (or a lower rate) simplifies the process and eliminates the need for extensive documentation to substantiate the deduction.