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New Auto Mileage Rates for 2013

By: Chuck Strauss

December 29, 2012

A couple of years ago, the available deduction for mileage changed in mid-year—that is, there were different amounts deductible, depending on the time of year the mileage was used.

For 2013 the deductible amounts will apply to the entire year, under the current rules—the amounts went up one penny for business use and for medical or moving rates.  The “charitable” rate remains the same.

Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.

Transportation—2013 Rates

  • Business Mileage Rate                     56.5˘/Mile
  • Medical and Moving Mileage             24˘/Mile
  • Charitable Mileage                             14˘ Mile

To use the standard mileage rate, you must own or lease the car and:

  • You must not operate five or more cars at the same time, as in a fleet operation
  • You must not have claimed a depreciation deduction using the Modified Accelerated Cost Recovery System (MACRS) on the car in an earlier year, including any additional first-year depreciation or "bonus depreciation" or any method other than straight-line for its estimated useful life
  • You must not have claimed a Section 179 deduction on the car; and you must not have claimed actual expenses after 1997 for a car you leased, and
  • You cannot use the standard mileage rate if you are a rural mail carrier who received a "qualified reimbursement.”

These rates are effective for:

  1. Deductible transportation expenses paid or incurred on or after January 1, 2013, and
  2. Mileage allowances or reimbursements paid to an employee or to a charitable volunteer (a) on or after January 1, 2013, and (b) for transportation expenses the employee or charitable volunteer pays or incurs on or after January 1, 2013.

Personal Uses for Schedule A, Itemized Deductions:

A deduction computed using the applicable standard mileage rate for charitable, medical, or moving expense miles is in lieu of a deduction for variable expenses (including gasoline and oil) of the automobile allocable to those purposes.

Costs for items such as depreciation or lease payments, insurance, and license and registration fees are not deductible for these purposes and are not included in the charitable or medical and moving standard mileage rates.

A taxpayer may deduct, as separate items, parking fees and tolls attributable to the use of the automobile for charitable, medical, or moving expense purposes.  However, interest relating to the purchase of the automobile and state and local personal property taxes is not deductible as charitable, medical, or moving expenses, but may be deducted as separate items to the extent otherwise allowable.

Business Uses—for Schedule C, Form 2106, etc.:

The optional business standard mileage rate can be used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method.

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

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of deductions may be found in the IRS Instructions for Schedule C.