Employers whose employees use their own vehicles business can now adjust their reimbursement forms and procedures for 2014, since the IRS released the standard mileage rates for the year in Notice 2013-80 on Dec. 6.
The IRS also adjusted the reimbursement rate for miles driven for medical purposes or a relocation, also by half a penny.
The standard mileage rates beginning Jan. 1, 2014 are:
- 56 cents per mile for business miles driven (down from 56.5 cents in 2013);
- 23.5 cents per mile driven for medical purposes or relocation (down from 24 cents); and
- 14 cents per mile driven in service of charitable organizations (unchanged).
The revised rates reflect decreases in costs related to driving, including the cost of gasoline and the cost of insurance. Changes in the depreciation rate of vehicles also factor into the yearly adjustment.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Revenue Procedure 2010-51 provides the rules for computing the deductible costs of operating an automobile for business, charitable, medical or relocation expenses; and for substantiating the expenses under Code Section 274(d) and Treas. Reg. §1.274-5. Employers using the standard mileage rates must comply with Rev. Proc. 2010-51.