Note: The latest standard mileage rate deduction amount from the IRS can be found at the updated, current article.
Here come the end of year numbers from the IRS for 2014. Recently, the Internal Revenue Service released the official 2014 standard mileage rates. Keep in mind that these are the number for miles driven during 2014. You’ll be using the 2014 numbers in early 2015 when you are filing your 2014 taxes. If you need the mileage rates for 2013 those are the one you use for the income taxes you are filing in early 2014.
2014 Mileage Rate Deduction Standard
As always, the IRS allows two ways to deduct expenses associated with tax deductible use of a motor vehicle. The taxpayer may claim either the actual expenses for vehicle, or claim a standard amount per mile instead. To claim the actual expenses for driving an automobile for deductible reasons, the taxpayer must keep complete records of all expenses occurred during the year. Considering how complicated filing income taxes is in the first place, why add another layer of complexity by keeping even more records, and making even more calculations.
The 2014 Mileage Rates are:
- 56 cents per mile for business miles driven
- 23.5 cents per mile for medical or moving miles driven
- 14 cents per mile for miles driven in service of a charitable organization
Most people choose to use the IRS standard mileage rates because it is so much simpler. And, as it turns out, for most vehicles, the mileage rate turns out to be fairly close to the actual expenses for most cars. In fact, if your vehicle gets very good gas mileage, the you will likely come out ahead by using the IRS rate for driving miles because it is calculated as an average for all vehicles.
In addition, the standard deductible mileage rate provides a way to use an automobile part-time for business or charity and still claim a deduction.
Many U.S. companies reimburse employee mileage using the per mile reimbursement rate set by the IRS as well, so check with your employer to see if your expense reports require using the new lower mileage rate in 2014.
In order to claim a deduction for vehicle use, the taxpayer must keep contemporaneous records. That mean that the miles driven must be logged as they are driven, not at some later date. More to the point, you must keep track of your miles all year long and not just try and come up with some estimated number at the end of the year, or when you are filling out your tax returns. The easiest way to satisfy this IRS record keeping requirement is to log the starting and ending odometer reading for each deductible trip in a mileage logbook. If you usually drive the same car for business or charity, then keep the mileage log in your glove compartment for easy access and availability.
Remember you cannot deduct miles driven commuting to and from your regular place of business. You may also not claim a miles deduction for any miles driven that are reimbursed by someone else, such as an employer.
This years mileage rates are one-half cent lower than the same miles rate for 2013, except for the charitable deduction mileage rate because that rate is set by law and not based upon the price of gas.