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IRS Announces 2015 Standard Mileage Rates

Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck are:

57.5 cents per mile for business miles driven, up from 56 cents in 2014
23 cents per mile driven for medical or moving purposes, down half a cent from 2014
14 cents per mile driven in service of charitable organizations

These optional standard mileage rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law. Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after claiming accelerated depreciation, including the Section 179 expense deduction, on that vehicle. Likewise, the standard rate is not available to fleet owners (more than four vehicles used simultaneously). Call us if you need additional information about these and other special rules.

In addition, basis reduction amounts for those choosing the business standard mileage rate, as well as the maximum standard automobile cost that may be used in computing an allowance under a fixed and variable rate plan and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) Plan were also announced by the IRS.

Let me know if you have any questions about standard mileage rates and which driving activities you should keep track of as tax year 2015 begins.

Comments

Thanks for the explanation.  So, how and when do we add the mileage to the tutoring session? Do we add it in advance to the hourly rate or once the session is complete?  Thank you.
Hi Emily,
 
WyzAnt provides a mileage tracker to keep track of miles used to and from tutoring sessions. However, keep in mind that you can only apply the Standard Mileage Rates (above), if you itemize on your income tax return. Generally, most taxpayers just use the Standard Deduction when filing their returns. For more information on how to file or claim such deductions, consult with your CPA or local Registered Tax Preparer. Also, there are a lot of tax scams going on right now so I suggest that you verify your tax professionals' credentials and/or certifications via irs.gov using their IDVerify tool.
 
All the Best,
 
-Rocky 

$49p/h

Rocky M.

CTEC, Registered Tax Preparer

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