Notice 2012-72—in addition to providing the standard mileage rates—also provides the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
Read the notice: Notice 2012-72 [PDF 31 KB]
According to related IRS release IR-2012-95 [PDF 36 KB], beginning on January 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be increased by 1.0 cent per mile for business and medical and moving purposes.
|
Purpose |
Rates beginning January 1, 2013 |
|
Business |
56.5 cents per mile |
|
Medical and moving |
24 cents per mile |
|
Charitable |
14 cents per mile (no change) |
Notice 2012-72 provides that for an automobile the taxpayer owns and uses for business purposes, 23 cents of the 56.5 cents per mile rate is attributable to depreciation expense in 2013.
Background
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile; the standard rate for medical and moving purposes is based on the variable costs as determined by the same study. The mileage rate for charitable miles is set by law.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. The business standard mileage rate can be used for an automobile that the taxpayer either owns or leases.
Rev. Proc. 2010-51 [PDF 49 KB] provides the rules for computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes; states that the number of business miles for the year must be substantiated; and explains what substantiation will be acceptable. Taxpayers using the standard mileage rates must comply with Rev. Proc. 2010-51.