The 2013 IRS Mileage Rates Announcement

It’s Fall, and that means the IRS will be issuing its annual updates for the upcoming tax season.  The IRS updates the mileage rate too every Fall, and it’s possible that there may be another increase but nothing is certain until we hear directly from the source itself: the Internal Revenue Service.  Last year, the mileage rate for using a vehicle for business started at $.51 per mile and then the unusual occurred: the IRS raised the rate halfway through the year.  2011 ended up with a $.555 per mile rate.

A mid-year increase in the IRS mileage rate has never happened before but may help explain why there may not be an increase for 2013.  The 2013 IRS mileage rate announcement will come any day now, as businesses prepare for the tax season, starting in just a few weeks, early December.  They use the rate as a benchmark for reimbursing employees who use their own vehicles for the business.  Some taxpayers also use the rate rather than figuring out their actual costs of driving the vehicle.

Business use of a vehicle is reimbursed at a much higher rate than driving a vehicle for charity or for medical purposes.  These IRS mileage rates are less than half the business rate.  The only exception to this pattern is during 2005 and 2006.  For those tax years, those who drove for charitable purposes having to do with Hurricane Katrina were reimbursed at the same rate as those who drove for business.  At that time the rate was under $.50 per mile.  The current rate for charitable driving is $.14 per mile.  The 2013 IRS mileage rate for charitable purposes is expected to remain the same as 2011.