Early in December the Internal Revenue Service (IRS) announced that the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes would stay the same as last year's previous adjustments.

Starting on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

The rate has not changed since last year July 1, 2011 when the medical and moving rate was reduced by 0.5 cents per mile.

The IRS determines these rates by conducting annual studies of the fixed and variable costs of operating an automobile of a small business. Runzheimer International, an international contractor, conducted the studies to determine the rates. 

The business standard mileage rate cannot be applied for more than four vehicles that are used simultaneously. Also it is good to remember, you have other options than standard mileage rates provided by the IRS. It is your right as a taxpayer to calculate the actual cost of vehicles rather than using a standard mileage rate. To do this, you may use any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or, after claiming a Section 179 deduction for that vehicle. 

Requirements for a taxpayer to use standard mileage rate to calculate the amount of a deductible business, moving, medical or charitable expense are located in Rev. Proc. 2010-51. In addition, Notice 2012-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and standard automobile costs that a taxpayer may use to compute these rates under certain plans. Visit the standard mileage rates website for more information.