Gas Prices Must be Going Down
Every year the IRS issues optional standard mileage rates that can be used by taxpayers to calculate the deductible cost of operating an automobile for business, charitable, medical or moving purposes. Many employers reimburse employees based on this standard mileage rate. The standard mileage rate also factors into medical expense reimbursement account plans for mileage driven for medical purposes. The IRS recently issued the 2014 rates.
Beginning January 1, 2014, the standard mileage rate for the use of a car, van, pickup or panel truck will be:
- 56¢ per mile for business miles driven,
- 23.5¢ per mile driven for medical or moving purposes and
- 14¢ per mile driven for charitable purposes.
The charitable rate is based upon statute and does not change. The business, medical and moving expense rates can vary from year to year and are one-half cent lower than the 2013 rate.
The IRS bases the rates on an annual study of the fixed and variable costs of operating an automobile. Although the IRS notice does not so state, presumably the general reduction in the price of gasoline figured into the half-cent reduction in mileage for the business, medical and moving expense miles.
Contact Benefits Notes for more information.