IRS Mileage Rate 2015: How To Track Mileage

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IRS Mileage Rate 2015: How To Track Mileage

The mileage rates 2015 for business drives is 57.5 cents per mile. The IRS decreased the standard mileage rate for 2016 to 54 cents per mile. Let’s go over what the business mileage rate is and what it means to you.

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How to Calculate Mileage for 2015 Mileage Rates

To track and calculate mileage, you’re going to need some form of a mileage log. This will keep track of your overall mileage, business purposes for trips, and the times and dates of your trips.

From there, you can take the business portions of those drives and multiply it by the standard mileage rate for 2015. That’s 57.5 cents per mile for 2015.

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How the Mileage Rate 2015 Works

If you drive a car, SUV, minivan, van, or pick-up for business, you have two options for deducting your vehicle expenses. You can use the standard mileage rate or you can deduct your actual driving expenses.

The standard mileage rate is the easiest to use. You take a mileage deduction for a specified number of cents for every business mile you drive. To calculate your mileage deduction, multiply your business miles by the standard mileage rate.  For 2015, that’s 57.5 cents per business mile.

Example: Ed drives his car 10,000 miles for business during 2015. To determine his car expense deduction, he multiplies his business miles by the 2015 mileage rate of 57.5 cents per mile. This gives him a total deduction for the year of $5,750 (57.5 cents × 10,000 = $5,750).

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If you choose the standard mileage rate, you cannot deduct actual car operating expenses. This includes maintenance, gasoline and its taxes, oil, insurance, and vehicle registration fees. The IRS rate factors these in.

Yet, you can still deduct the interest you pay on a car loan. You can also deduct parking fees and tolls for business trips. But you can’t deduct parking ticket fines or the cost of parking your car at your place of work.

The IRS adjusts the rate each year. The adjustments include a complex formula that isn’t disclosed to the public. The formula does include the cost of gas, depreciation and more.

The IRS rate is set for the beginning of the year and generally remains in effect for the entire year. Yet, the IRS could make a mid-year correction to the rate depending on things like gas prices. It has done this before during years when gas prices were extremely volatile.

YearRate per MileDates Covered
201753.5 cents1/01/17 - 12/31/17
201654 cents1/01/16 - 12/31/16
201557.5 cents1/01/15 - 12/31/15
201456 cents1/01/14 - 12/31/14
201356 cents1/01/13 - 12/31/13
201255.5 cents1/01/12 - 12/31/12
201155.5 cents7/01/11 - 12/31/11
201151 cents1/01/11 - 6/30/11
201050 cents1/01/10 - 12/31/10

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Who Can Use the Standard Mileage Rate 2015

There are some important restrictions on who can use the standard mileage rate. If you don’t qualify to use it, you must use the more complicated actual expense method. This requires you to keep track of what the gas, repairs and other expenses you actually incur when you drive for business.

First, and most important, you must use the mileage rate the first year you use a car for business. That is, you may not use the actual expense method the first year. If you use the actual expense method, you can’t ever use the standard mileage rate for a deduction for that business car.

You can switch between the methods but only if you used the standard mileage rate the first year. If you use the actual expense method the second year, but sure to use the straight-line depreciation method. This is the slowest method of depreciation. It gives you equal depreciation deductions every year, rather than the larger deductions in the early years. If you take the accelerated depreciation or bonus depreciation, you can’t switch back to standard mileage rate.

Also, you may only use the standard mileage rate method for a maximum of four cars at the same time.

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Standard Mileage Rates for Non-Business Driving

Certain types of nonbusiness driving are tax deductible. Yet, to deduct non-business driving, you must itemize your personal deductions on your tax return instead of taking the standard deduction. If you don’t itemize, you get no deduction.

2015 Mileage Rate for Medical-Related Driving

If you do itemize, you can deduct medical-related driving costs as part of your medical expense deduction. You can deduct your medical-related driving costs one of two ways. You can use your actual expenses, or the standard medical mileage rate. The medical mileage rate 2015 was 23 cents per mile. This was reduced for 2016 to 19 cents per mile.

2015 Mileage Rate for Charitable Driving

You can also deduct the use of your car in giving services to a charitable organization. For example, you can deduct your driving expenses if you drive each week to a local hospital to volunteer. As with medical-related driving, you can deduct your actual expenses or use the standard charitable mileage rate 2015. This rate remains unchanged for 2016: 14 cents per mile. The 14 cents per mile rate is very low—it hasn’t been adjusted in many years. Thus, you’ll certainly get a larger deduction if you use the actual expense method.

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Mileage Reimbursement Calculation

If you get a mileage reimbursement, you can use the standard mileage rate 2015 to figure it out. Keep in mind that the IRS doesn’t mandate companies reimburse you at all, nor that companies use the mileage rate.

Still, many companies peg their reimbursements to the standard mileage rate. You can figure out your mileage reimbursement calculation by multiplying your business drives by the applicable rate.

Maximize Your Mileage Deduction

The 54 cents per mile may not seem like a large amount but remember, it can add up.

The hardest part about taking advantage of the mileage rate is actually tracking the miles that you drive. Tracking your miles with pen and paper is simple. But, it’s also error-prone, time-consuming and easy to forget.

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MileIQ

MileIQ is a smart mileage tracking app for iOS and Android that catches your drives automatically, calculates their value, then lets you easily classify them as business or personal when you’re ready.

MileIQ captures and logs your drives automatically while you focus on your business.
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MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.