The IRS has announced the optional standard mileage rates for 2015. The rate for business use of a car, van, pickup truck or panel truck is 57.5 cents per mile, up one-half a penny from the 2014 rate. The charitable and medical/moving rate is 23 cents per mile, down slightly from the 2014 rate. These rates will apply to deductible transportation expenses paid or incurred by taxpayers during 2015 (Notice 2014-79).
Many employers use these standard mileage rates to reimburse employees who drive their personal vehicles for business purposes. While a company can also require an employee to substantiate the actual costs of driving their vehicle, using the mileage rate simplifies the recordkeeping required by the IRS. The rate may change from year to year, depending on changes in fuel prices and other factors.
For 2015, the portion of the business mileage rate that is treated as depreciation will be 24 cents per mile, up two-cents from the 22-cent rate in effect for 2014. However, the decline in gasoline prices throughout 2014 did not appear to affect the determination of the 2015 rates.
Individuals who claim actual expenses must keep track of every expense that is attributable to the business use of their vehicle, including depreciation, repairs, maintenance and fees, insurance, gasoline, licenses and registration fees. This can be a time consuming task and is generally not preferred by taxpayers who are reimbursed by their employer for using a personal vehicle for work-related reasons.