Business Standard and Medical/Moving Mileage Rates Increase for 2013
The IRS has announced increases in both the optional business standard mileage reimbursement rate and the standard mileage rate for medical and moving expenses for 2013. All increased by one cent, to 56.5 cents and 24 cents per mile, respectively. Also showing a slight increase in 2013 is the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan. The depreciation component of the business standard mileage rate, however, remains as it has been in 2012.
CCH Take Away: "The standard mileage rate adjustment for 2013 reflects increases in maintenance and fuels costs," said Abe Schneier, senior technical manager, American Institute of Certified Public Accountants (AICPA). In recent years, the IRS made mid-year adjustments in the business and medical/moving standard mileage rates (except for the charitable rate, which is set by statute) because of spikes in fuel costs. There was no mid-year adjustment in 2012, Schneier noted.
The IRS works with an independent contractor to establish the business, medical and moving expense standard rates. The IRS and the independent contractor take into account the fixed and variable costs of operating an automobile, such as fuel costs and maintenance expenses. The charitable mileage rate, in contrast, is set by statute at a flat 14 cents per mile without inflation adjustment each year.
"Congress could increase the charitable mileage rate in year-end legislation, but that prospect does not seem likely at this time," Schneier observed.
The depreciation component of the business standard mileage rate will be 23 cents per mile for 2013, the same as for 2012. In 2011 the rate was 22 cents per mile; in 2010 the rate was 23 cents per mile, and in 2009 the rate was 21 cents per mile.
For purposes of computing the allowance under a FAVR plan, the standard automobile cost may not exceed $28,100 for automobiles; and $29,900 for trucks and vans. This represents an increase from 2012 of $28,000 and $29,300, respectively.
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