For those of you who use your personal vehicle in your business you may want to read the information below regarding the changes in mileage deduction for 2011 and 2012.
photo credit: Dougtone
Mileage Rates for 2012
If you drive a car, truck or van for work, you’ll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2012.
These mileage rates are used to calculate deductible costs for driving an automobile for business, charitable, medical and moving purposes. So when it comes to filing your taxes this time next year, you’ll need to know these numbers!
New for 2012
As of January 1, 2012, the standard mileage rates are as follows:
- Businesses = 55.5 cents per mile driven
- Medical or moving = 23 cents per mile driven
- Charitable organizations = 14 cents per mile driven
You’ll notice that the rate for business miles is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.
Make Sure You Qualify
Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot 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 deduction for that vehicle.
In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. However, the IRS is accepting public comments on this policy.
Additional Option
Although the IRS provides the standard mileage rate for ease and convenience, you’re not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.
