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IRS announces standard mileage rates for 2014

January 3, 2014

Businesses and individuals who rely on the IRS’s standard mileage rates to calculate deductible vehicle expenses will see a slight decrease in the deduction next year. The cents-per-mile rate is based on the costs of operating a vehicle. Read on to see what the standard mileage rates for tax purposes will be in 2014, along with the current national average price of a gallon of gas.

The Internal Revenue Service has issued the 2014 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56 cents per mile for business miles driven.
  • 23.5 cents per mile driven for medical or moving purposes. 
  • 14 cents per mile driven in service of charitable organizations

The rate for business miles driven during 2014 decreases one-half cent from the 2013 rate. The medical and moving rate is also down one half cent per mile from the 2013 rate. However, the rate for charitable driving, which can be amended only by Congress, remains at 14 cents per mile for the entire year.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

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 deduction for that vehicle.  In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

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