Tuesday Tax Tip: 2012 Mileage Rates For Business, Moving, Charity and Medical Purposes
A few months ago the IRS announced 2012 mileage rates used to calculate the deductible cost of using your automobile for business, charitable, medical or moving purposes.
Let me first kill your curiosity for how mileage rates are calculated. Standard mileage rate for business, medical and moving are based on fixed and variable costs of operating an automobile. Independent contractor Runzheimer conducts the annual study for the IRS.
Taxpayers that itemize their tax return can deduct costs for operating an automobile if it driven for business, moving, charity and/or medical purposes. The IRS does give us the option of deducting the actual cost for using our vehicle or using the standard mileage rates. Generally, most taxpayers use standard mileage rates.
2012 Mileage Rates – Effective January 1, 2012
Applicable vehicle is car, van, pickup and/or panel truck
- Business – 55.5 cents per mile
- Moving – 23 cents per mile
- Medical – 23 cents per mile
- Charitable and Volunteer – 14 cents per mile (Read an earlier post on charitable mileage and deductions.)
Print out this handy guide for reference and/or keep it with your supporting tax documents.
|Purpose||Rate/Mile Driven, Effective January 1, 2012|
|Charitable Organization||14 cents|
Calculate Mileage Rate Deduction
Making this calculation is pretty simple. Simply add up the miles you traveled for the given purpose, multiply that number by the per-mile rate, and you end up with your deduction.
Total miles x Standard Mileage Rate = Deduction
There are certain rules that taxpayers must follow to deduct miles driven for business, moving, medical and charitable purposes. Given the tax complexities of our tax code, you should consult with your tax advisor on what you can and can not deduct. For a summary on charitable mileage rates and deductions, see an earlier blog post by clicking here.
More Federal Tax Return Information:
- Instructions and publications for 2012 IRS Mileage Rates and IRS tax forms are found at www.IRS.gov or by clicking: Business, Moving, Medical, and Charity.
- Select Federal Tax forms can also be found under the ‘Resources‘ tab at MoneyandMap.com
- Check out answers to 2011 Standard Deductions, Personal and Dependent Exemptions along with Federal Tax Brackets..
- Prepare for the current tax year by reviewing 2012 Federal Tax Brackets, Standard Deductions and Personal and Dependent Exemptions.