The 2012 IRS mileage rates (2013 IRS mileage rates) vary depending on whether you are claiming mileage for business travel, moving expenses, charitable work or medical-related traveling. Each category of travel has its own mileage rate used to calculate the tax deductible expenses related to driving your vehicle.
IRS mileage rates are determined through analysis of fuel prices, average driving expenses, car maintenance and registration costs. When the IRS calculates the business mileage rate, it does so using both fixed car expenses and variable car expenses, while rates for medical, moving or charitable work travel are based on variable expenses only.
In June of 2011, the standard mileage rate for business-related travel was increased to 55.5 cents per mile up from 51 cents due to higher gas prices. This new rate is effective January 1, 2012. If you have eligible business-related travel expenses, you can choose to deduct the specific expenses related to the travel (oil, gas, etc) or you can use the standard mileage rate to calculate your deductible business travel expenses.
Keep in mind that if you claim the Section 179 deduction for your car, or use any other depreciation under the Modified Accelerated Cost Recovery System, you can’t also take the standard business rate for the same vehicle.
Medical and Moving-Related Mileage
If you have eligible medical mileage to deduct, the 2012 IRS mileage rate is 23 cents per mile. Medical mileage can be claimed if you are eligible to take a medical expense tax deduction. If your total medical expenses are greater than 7.5% of your adjustable gross income, you can deduct the amount of medical expenses (including medical-related mileage) in excess of 7.5% of your income.
For individuals who are eligible to claim the moving-related mileage deduction, the 2012 IRS mileage rate is 23 cents per mile. People who move to start a new job in the same line of work may be eligible to deduct their moving expenses, including mileage, from their taxable income.
Charitable Work-Related Mileage
Congress has set the charitable work related mileage tax deduction at 14 cents per mile.