2013 Business Standard Mileage Rate Increases

by Michael W. Blitstein, CPA 

The IRS has announced increases in both the optional business standard mileage reimbursement rate and the standard mileage rate for medical and moving expenses for 2013. All increased by one cent, to 56.5 cents and 24 cents per mile, respectively. Also showing a slight increase in 2013 is the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan. The depreciation component of the business standard mileage rate, however, remains as it has been in 2012.

The standard mileage rate adjustment for 2013 reflects increases in maintenance and fuel costs. In recent years, the IRS made mid-year adjustments in the business and medical/moving standard mileage rates (except for the charitable rate which is set by statute) because of spikes in fuel costs. There was no mid-year adjustment in 2012.

The IRS works with an independent contractor to establish the business, medical and moving expense standard rates. The IRS and the independent contractor take into account the fixed and variable costs of operating an automobile, such as fuel costs and maintenance expenses.

The charitable mileage rate, in contrast, is set by statute at a flat 14 cents per mile without inflation adjustment each year.  Congress could increase the charitable mileage rate in year-end legislation but that prospect does not seem likely at this time.