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Posted 12/9/11
IRS Announces 2012 Standard Mileage Rates
The 2012 standard mileage rate for computing the deductible costs of business automobile is 55.5 cents per mile for 2012. The standard mileage rate for charitable miles is 14 cents per mile, set by Congress and unchanged from 2011. The standard mileage rate is 23 cents per mile for use of an automobile for medical care or moving.
For automobiles a taxpayer uses for business purposes, the basis of the vehicle must be reduced at 21 cents per mile for 2008 and 2009, 23 cents per mile for 2010, 22 cents per mile for 2011, and 23 cents per mile for 2012. For purposes of computing the allowance under a Fixed and Variable Rate plan, the standard automobile cost may not exceed $28,000 for automobiles (excluding trucks and vans) or $29,300 for trucks and vans.
A taxpayer may 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 expensing deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
An independent contractor conducts an annual study for the IRS of the fixed and variable costs of operating an automobile to determine the standard mileage rates for business, medical, and moving reflected in the IRS's new numbers.
Click here for the full text of the Notice.
Click here for the full text of the IRS News Release.