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Business Use of Automobiles and Standard Mileage Rates

January 22, 2015

Taxpayers may use the optional business standard mileage rate in computing the deductible costs of operating passenger automobiles owned or leased by them (including vans and pickup or panel trucks) for business purposes.

A taxpayer who uses this method multiplies the number of business miles by 56¢ per mile for travel during 2014. The rate for 2015 is 57.5 cents per mile for business miles driven.

A deduction using the standard mileage rate is in lieu of deducting operating and fixed costs. A taxpayer who uses the standard mileage rate forgoes deductions for depreciation (or leasing costs), maintenance and repairs, tires, gasoline (including taxes), oil, insurance, and registration fees. But deductions for parking fees and tolls are still available.

Use of the standard mileage rate isn't available for five or more autos that are used simultaneously, such as in fleet operations, nor is it available for a purchased car if the taxpayer previously depreciated it using any method other than the straight-line method, or if Code Sec. 179 expensing or additional first-year depreciation has been claimed. The standard mileage rate may generally be used for a leased auto only if the taxpayer uses this method (for the entire lease period (including renewals).

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

  • 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

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