IRS Mileage Rates for 2012 Taxes

Starting on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

These were announced on December 9, 2011, when the IRS issued IR-2011-116.

The rate for business miles driven 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.

You  always have the option of calculating the actual costs of using your vehicle rather than using the standard mileage rates.  However, you 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 deduction for that vehicle.  Also, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

These and other requirements for you to use a standard mileage rate to calculate the amount of a deductible business, moving, medical or charitable expense are in Rev. Proc. 2010-51.

The bottom line is that the IRS continues to recognize it costs you more to operate your vehicle for business related travel.   The strange part is that the medical and moving rate has been reduced by 0.5 cents per mile while the price of gasoline continues to go up.