IRS raises mileage rate 1 cent for 2013
The deduction rate for business travel will rise to 56 cents a mile, and the rate for medical travel and moving will rise to 24 cents. The charity rate will not rise.
This post is by Kay Bell at Bankrate.com.
I carefully note every mile I travel for a business meeting or other professional task so, like all my self-employed colleagues, I can deduct them on my tax return. But salaried workers also can deduct mileage if they travel for their jobs and aren't reimbursed by their employers.
It's not a huge deduction, but when you're scraping for any tax savings, every little bit helps.
And the Internal Revenue Service is making our possible tax savings a tiny bit larger in 2013, thanks to a penny increase in the standard mileage deduction amounts for travel connected to business and medical treatments, as well as for moving.
It's the first increase since mid-2011, when gas prices were skyrocketing. In that unusual summer adjustment, the tax deduction rate was hiked 4.5 cents per mile.
Gas prices and the adjustments, however, have leveled off since then. The current standard per-mile deduction amounts are 55 cents for each business mile and 23 cents per mile for medical and moving travel.
In 2013, drivers will be allowed to deduct 56 cents for each mile of business travel and 24 cents for medical and moving miles.
Each year the IRS contractor Runzheimer International looks at fixed and variable automotive operating costs. This includes car insurance, expenses associated with vehicle wear and tear, gasoline costs and vehicle characteristics such as miles per gallon or fuel economy. Then it suggests whether the IRS mileage allowance should go up, or in some cases, down.
"Higher maintenance costs and fuel prices are the primary reasons for the increase in the national optional business deduction," said Ted Schuerman, senior project leader at Runzheimer International, in a statement announcing his firm's findings.
Of course, if you prefer, you can figure your deductible travel by calculating the actual costs of using your vehicle for business, medical travel or moving. This entails keeping track of gas, oil, tolls, registration fees, repairs, tires, parking fees, insurance and the like. That's why many of us opt to claim the standard mileage rates.
There's one other mileage rate that gets announced each year -- the mileage amount you can deduct for travel in service of a charity. That's 14 cents per mile. And it hasn't changed for years.
The reason? The charitable per-mile deduction rate is set by statute and despite periodic efforts to have it also tied to inflation like the other travel, Congress hasn't gotten around to making that change.
More from Bankrate.com and MSN Money:
Isn't the 2012 deduction for business travel 55.5 cents per mile, not 55 cents?
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.