Saturday, December 10, 2011
2012 STANDARD MILEAGE ALLOWANCES
Before I leave I just wanted to let you know that the Internal Revenue Service has issued the 2012 optional standard mileage rates used to deduct using your car for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
•55.5 cents per mile for business miles driven
•23 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 is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile by independent contractor Runzheimer International. The rate for medical and moving purposes is based on the variable costs as determined by the same study (i.e. no depreciation component).
The rate for charitable driving is set by Congress. The idiots have not increased this amount to reflect reality in years.
The rules for deducting the use of your car for business are discussed in my Guide to Schedule A.