There’s good news and bad news about gas prices.
The good news is that the cost of fueling up has gone down, meaning more money in your pocket. The bad news is that, since those costs are tied to the optional standard mileage rates, those deductions will be a bit smaller in 2014.
Today, the Internal Revenue Service issued Notice 2013-80 (downloads as a pdf) which provides the 2014 standard mileage rates for business, charitable, medical, or moving expenses. Beginning on January 1, 2014, the standard mileage rates for the use of an automobile (which includes cars, vans, pickups or panel trucks) will be:
- 56 cents per mile for business miles driven
- 23.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
The rates for business, medical, and moving expense rates are one-half cent per mile below the 2013 rates, but the rate for charitable expenses remain as they were in 2013 – and as they have since the Clinton era.
While the rates for business, medical and moving expenses are adjusted each year, the rate for charitable expenses is fixed by statute and can only be changed by Congress (which, apparently, they aren’t inclined to do).
The optional standard mileage rates are used to easily calculate the amount of a deductible business, moving, medical or charitable expense (miles driven times the applicable rate). Taxpayers always have the option of deducting their actual costs rather than using the standard mileage rates – though admittedly, that’s a lot more work. No matter which option you choose, be sure to keep good records.
As noted above, these rates go into effect at the beginning of 2014 for the 2014 calendar year. That means they’ll show up on your 2014 returns (the ones you’ll file in 2015). You’ll use the 2013 rates for the return that you’ll submit in 2014.
