Business Standard Mileage Rate Up to 57.5 Cents For 2015

Business Standard Mileage Rate Up to 57.5 Cents For 2015

The new optional mileage allowance for the business use of owned or leased autos, vans, pick-up or panel trucks will be 57.5 cents a mile in 2015, up 1.5 cents from 2014, it was announced by the IRS. That rate can also be used by employers to provide tax-free reimbursements to employees who supply their own vehicles for business use and substantiate the time, place, business purpose and mileage of each trip. 

The rate for using a car to get medical care or in connection with a move that qualifies for the moving expense will decrease by a half-cent to 23 cents per mile.

The IRS noted that the mileage allowance is an option to take instead of separate deductions for lease payments (or depreciation if the vehicle is purchased), maintenance, repairs, tires, gas, oil, insurance, license and registration fees. The taxpayer may still claim separate deductions for parking fees and tolls connected to business driving.

Among the advantages of using the standard mileage rate is that users do not have to keep records of actual expenses or retain receipts. A record of time, place, business purpose and the number of miles traveled suffices. The mileage rate method may also yield bigger deductions than the actual expense method for a thrifty, high-mileage-per-gallon vehicle. With the price of gasoline declining in recent days, this seems to be the way to go.