IRS Announces Mileage Rate for 2012

The Internal Revenue Service issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical or charitable expense are shown in Rev. Proc. 2010-51.

Notice 2012-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

Senate Committee Passes Vehicle Safety Legislation

The U.S. Senate Commerce Committee has passed and sent to the Senate floor two vehicle safety bills.  The Commercial Motor Vehicle Safety Enhancement Act (S. 1950) is intended to ensure only the safest fleets and drivers are able to enter the industry, improve the safety laws governing current carriers and drivers, and increase FMCSA's enforcement tools to remove unsafe and unfit drivers and carriers from the industry.  This bill includes a requirement for electronic on-board recorders be used on all trucks and buses used in interstate commerce.

The second bill is the Motor Vehicle and Highway Safety Improvement Act of 2011 (Mariah’s Act). S. 1449 reauthorizes highway and vehicle safety programs under the National Highway Traffic Safety Administration (NHTSA). The bill includes provisions concentrating resources to prevent distracted driving.