The IRS has issued the 2013 optional standard mileage rates. The standard mileage rate for business miles driven will increase 1 cent, from 55.5 cents per mile to 56.5 cents per mile.
Updated: For information on 2014 mileage rates, read IRS issues 2014 optional standard mileage rates.
Beginning on January 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 56.5 cents per mile for business miles driven
- 24 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
The medical and moving rate is also up 1 cent per mile from the 2012 rate.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
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.
The employer may deduct reimbursements at a higher rate, but only if the reimbursements reflect the actual cost of the travel and only if the employer keeps adequate records to substantiate its outlays. Reimbursements for tolls, parking, etc., may be deducted in addition to the mileage allowance.
Source: IRS Notice 2012-72
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Is your employee handbook ready for 2013? Join us December 7 to learn about what you should change and what you should keep in 2013. Learn more about the webinar, New Year, New Laws, New Employee Handbook.