Author: Rena Pirsos, XpertHR Legal Editor

The Internal Revenue Service (IRS) has released the 2013 optional standard mileage rates used to calculate the deductible cost of operating a passenger car (also vans, pickups or panel trucks) for business, charitable, and medical or moving purposes and the company fleet maximum valuation amounts. Employers may also use the rates to determine the fair market value of an employee's taxable personal use of an employer provided vehicle under certain valuation methods.

Under the vehicle cents-per-mile valuation method, the fair market value of an employee's personal use of an employer provided vehicle is determined by multiplying the business standard mileage rate by the number of personal miles driven. The result is the value of personal miles that must be taxed.

Beginning January 1, 2013, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 56.5 cents per mile for all business miles driven (up from 55.5 cents per mile in 2012);
  • 24 cents per mile for deductible medical or moving expenses (up from 23 cents per mile in 2012); and
  • 14 cents per mile driven in providing gratuitous services for charitable organizations (this rate is set by law and is unchanged from 2012).

Employers that have a fleet of at least 20 vehicles may use the average fair market value of the vehicles to determine their annual lease value. The fair market value of any of the vehicles in the fleet may not exceed a certain amount on the day the vehicle is first provided to the employee for use. These amounts are adjusted annually for inflation. For 2013, the maximum value is $28,100 for a car (up from $21,100) and $29,900 for trucks and vans (up from $21,900 in 2012).

+IRS Notice 2012-72, Nov. 21, 2012.

XpertHR has updated these rates and amounts in the Employment Law Manual.

Additional Resources

Payroll > Taxation of Employee Compensation > Valuation Methods

Payroll > Taxation of Employee Compensation > Standard Mileage Rate

Payroll > Taxation of Employee Compensation > Qualified Moving Expense Reimbursements