Not Much Changed From 2011 | Tax Tip of the Week | No. 129

IRS Announces 2012 Mileage Rates

The 2012 optional standard mileage rate used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes is:- 55.5 cents per mile for business purposes- 23 cents per mile for medical or moving purposes- 14 cents per mile driven in service of charitable organizationsThe rate for business miles driven is unchanged for 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 charitable mileage rate is set by Congress and remains unchanged.The depreciation component of the business mileage rate is 23 cents per mile.Taxpayers always have the option of calculating the actual costs of using their vehicles rather than using the standard mileage rates.However, you cannot use the standard mileage rates for business if you made the election to take a deprecation deduction in the year you placed the vehicle in service.Regardless of which method you choose to deduct vehicle expenses, the IRS requires that you keep contemporaneous records to substantiate your deductions.Stay safe while driving in 2012---and keep track of those miles!

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