*OFFICE Central*
Travel / Vehicles Category
Mileage Rate Explained
For income tax purposes, the Internal Revenue Service (IRS) sets a standard mileage rate for individuals to compute the deductible costs of operating a personal vehicle for business purposes. Instead of deducting actual costs, an individual may choose to use the standard mileage rate as computed by the IRS. The rate is typically adjusted every calendar year.
The IRS's standard mileage reimbursement rate is based on national cost averages for expenses toward fuel, maintenance, and repairs. Plus, the IRS's standard mileage reimbursement rate also allows for monthly payments toward the average price of a new vehicle. The standard mileage rate is based on the national averages of both fixed and variable costs of purchasing and operating an automobile. The cost includes the purchase price and all maintenance needs of an average vehicle and assumes the vehicle will be replaced every 5 years for income tax reporting purposes. The cost does not include interest on a loan used to purchase a vehicle, vehicle property taxes, parking fees, or tolls.
With each adjustment to the IRS standard mileage rate, Finance Office will release a new travel reimbursement form with the new rate.
To increase the benefit you receive from reimbursements for using your personal vehicle, we encourage you to safely operate your personal vehicle for a longer term than the average vehicle loan (which is 5 or 6 years).
If you believe you are not receiving full reimbursement for use of your personal vehicle for County business, you may be able to take advantage of an itemized deduction when filing federal income tax return. The difference between what you were reimbursed by the County and what you would have been reimbursed at the IRS's rate for all miles driven can be added to any other out-of-pocket, not reimbursed, County business expenses and, collectively, subject to a minimum of 2% of your adjusted gross income.
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