The IRS has issued the 2012 optional standard mileage rates. The standard mileage rate for business miles driven will remain at 55.5 cents per mile.
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Download NowBeginning on January 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
There was only one adjustment from the 2011 mid-year rate, the medical and moving rate, which decreased by .5 cents.
The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
Employers that use the IRS standard mileage rate to reimburse employees may deduct the reimbursement as a business expense. If employers use the approved rate (or a lower rate), the IRS considers that requirements to substantiate and adequately account for the expense are satisfied without extensive documentation of actual expenses.
Notice 2012-01 contains additional information on the 2012 standard mileage rates.
Tip for employers and HR professionals: Make sure your organization is aware of important tax dates in 2012.