Nonprofit organizations use the IRS or their State’s mileage reimbursement rates as a guide for reimbursing employees for travel and for estimating expenses for budgeting and grant writing purposes.
IRS Mileage Rates:
Beginning on January 1, 2012 the standard mileage rates for the use of a car, van, pick-up or panel truck according to the IRS is:
- 55.5 cents per mile for business miles driven (22 cents is for depreciation)
- 23 centers per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
With the IRS taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Revenue Procedure 2010-51 and Notice 2012-01 contain additional details regarding the standard mileage rates.
State Rates May Differ:
Always check your state’s reimbursement rates because they might differ from the IRS. In Colorado statute CRS24-9-104 states that after January 1, 2008 the state will reimburse 90% of the prevailing IRS rate per mile for a two-wheel drive car and 95% for a four-wheel drive car. The 2012 Colorado rates are:
- 50 cents per mile for two-wheel drive vehicles
- 53 cents per mile for four-wheel drive vehicles
It is important to keep a record of the mileage you incur so that you have the information available when filing your taxes. If you qualify to use your mileage based on the IRS mileage regulations, you also need to keep the records to prove what you incurred. A mileage log should include the Date, beginning odometer reading, ending odometer reading, miles traveled, purpose of trip, and then a column that includes a running total for the total miles.
If you are reimbursed for your mileage, you must include in your income any amount above the mileage reimbursement rates, and you cannot count that mileage on your taxes.