Tax Alerts - January 2012
January 2012 PDF »
January 2012 Articles
- Early Planning Can Make 2012 Filing Season Easier »
- Payroll Tax Cut Extended Two-months; Other Temporary Incentives Expire »
- Looking Back: Top 10 Federal Tax Developments of 2011 »
- FAQ – When Do I Need to File IRS Form 8938, Statement of Specified Foreign Financial Assets? »
- How Do I – Claim a Charitable Contribution of Property? »
- January 2012 Tax Compliance Calendar »
- IRS Releases Business Standard Mileage Rate for 2012 »
- IRS Updates Form 940 for Mid-year Expiration of FUTA Surtax »
- IRS Revises Regulations for Capitalization of Tangible
Assets »
- IRS Reminds Dual Citizenship Taxpayers to Report Foreign Accounts »
- IRS Relief for IRA Owners Entering into Broker Indemnification Agreements »
- Newsletter Summary Page »
Professionals
IRS Releases Business Standard Mileage Rate for 2012
The business standard mileage rate, which many employers use to reimburse employees for business miles driven, is 55.5 cents-per-mile for 2012, the IRS has announced. This reflects no change from the second half of 2011.
Deduction
Under Code Sec. 162(a), taxpayers are allowed a deduction for the ordinary and necessary expenses a taxpayer incurs while operating an automobile for trade or business purposes. Depending on their automobile usage, taxpayers may have several options for calculating the deduction. They may use the actual expense method, which requires them to determine the actual costs to operate the car for business uses. (Actual expenses include gas, oil, repairs, tires, insurance, registration fees, licenses, and other qualified expenditures.)
In the alternative, taxpayers may use the business standard mileage rate set by the IRS. (Although, in order to use the business standard mileage rate, the taxpayer must not operate five or more vehicles at the same time – as for example in a fleet vehicle operation.)
Business Standard Mileage Rate
In June 2011, the IRS announced a mid-year increase in the business standard mileage rate. The business standard mileage rate increased from 51 cents-per-mile to 55.5 cents-per mile for the second half of 2011.
For 2012, the business standard mileage rate will be 55.5 cents-per-mile, which reflects no change from the second half of 2011.
Other Rates
For 2012, the standard mileage rate for medical and moving expenses will be 23 cents-per-mile, reflecting a 0.5 cents-per-mile reduction from 2011. The statutorily-determined rate for the charitable deduction remains unchanged at 14 cents-per-mile for 2012.
To ensure compliance with requirements imposed by the IRS, please note, any advice contained in this publication was not intended, or written, to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This publication is distributed with the understanding that the publisher and distributor are not providing legal, accounting or other professional advice and assume no liability whatsoever in conjunction with the information contained within this publication.