People who use a car, truck or other vehicle for business, medical, charitable or otherwise commercial purposes only are able to deduct a standard mileage rate from their yearly income tax. The IRS has recently of revealed the standard mileage rates.

Any use of a car or other small vehicle such as pickup or panel trucks for business can be deducted at the following rates:

56¢ per mile for commercial or business purposes
23.5¢ per mile for moving or medical purposes
14¢ per mile for charity work purposes

These rates for commercial, business, moving and medical purposes were 1/2¢ higher than last year. The charitable rate allowed for miles driven remains the same.

How does the Internal Revenue Service come up with these rates? Each year, they conduct a study of the standard and a variable rate of vehicle operation. The numbers they end up with are used to directly set the rate for moving and medical vehicle operation costs.

For those taxpayers who use a vehicle for business purposes, it is possible for them to calculate their own rate based on actual usage. It is not required by the IRS to use the standard mileage rates listed above. If they use a depreciation method outlined by the Modified Accelerated Cost Recovery System (MACRS) they are no longer able to use the standard mileage rates. This also holds true if they claim a section that 179 deduction for the car or truck in question. These standard rates can only be used for up to four vehicles.

For more information about the guidelines and rules covering the standard mileage rate, please see Rev. Proc 2010-51. This publication gives all the necessary information for taxpayers to follow if they choose to use the standard mileage rates to determine business, medical or charitable deductions for the tax year. Notice 2013-80 lists the basic information about how the total amount that can be claimed when filing taxes, how to use either the fixed or variable rate plan and more in depth information about the standard mileage rates for business vehicles.

Author's Bio: 

Misty Jhones