New 2014 mileage rates used to calculate deductible costs for operating an automobile were announced this month by the Internal Revenue Service.
Standard mileage rates for business, medical and moving travel will decrease for 2014, down one-half cent from 2013 rates. The mileage rate drops to 56 cents per mile next year, down from 56.5 cents for 2013. The modified rate when driving for medical or moving purposes climbs down to 23.5 cents per mile, also down a half-cent from 2013. Finally, the rate for mileage driven for charitable purposes is fixed by law at 14 cents per mile.
Please note, the IRS states that the business standard mileage rate for a vehicle cannot be used by taxpayers who use any depreciation method under the Modified Accelerated Cost Recovery System or after claiming a Section 179 deduction. Also, the business standard mileage rate cannot be used for more than FOUR vehicles used simultaneously.
Lastly, taxpayers can choose to use actual costs of using their vehicles for business purposes, rather than utilizing the standard rate.
On how this may impact your personal or business tax preparation, please call Heckman Tax at 206-329-4740.