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Standard Mileage Rates for Owner Operators

December 12, 2013

The IRS has announced the 2014 optional standard mileage rates for business, charitable, medical or moving expenses. The new rates will come into effect beginning Jan 1, 2014. For the use of an automobile including cars, panel truck, pickups and vans, the mileage rates in 2014 will be:

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

For the business miles driven, there is a slight decrease from the 56.5 cents per mile in 2013. For medical and moving purposes also, there is a slight decrease from the 24 cent per mile in 2013. The rates for charitable organizations have remained the same at 14 cents per mile as in the previous years. These rates can only be changed by Congress, as they are determined by the statute.

The optional standard mileage rate for business is determined after reviewing the fixed and variable costs of operating an automobile. For medical and moving purposes, the rate is determined by taking into account the variable costs.

The deductible expenses for operating an automobile for business, medical or moving purposes, and charitable organizations can be calculated by multiplying the miles driven by the appropriate rate. Those that have used the Modified Accelerated Cost Recovery System (MACRS) or claimed a Section 179 deduction for a particular vehicle must not use the business standard mileage rate for that vehicle.

An important instruction to remember is that you cannot use the business standard mileage rate for more than four vehicles used simultaneously. Make sure the calculations and records you have are accurate for making the deductions. These rates are for 2014 and will be relevant for the tax return filings made in 2015.

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