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The IRS releases the mileage reimbursement rates for 2015

Dec 12Jeff Matthews

Just released from the IRS the 2015 mileage reimbursement rates, the optional standard mileage reimbursement will be $0.575 per mile in 2015, up from $0.56 per mile in 2014.

Medical and moving reimbursement rates dropped by one-half cent in 2015 to $0.23 per mile.  Rates applicable for rendering gratuitous services to a charitable organization will remain unchanged at $0.14 per mile.

You may asked why the standard rate is climbing when fuel prices have been dropping.  The IRS uses an outside service to survey fuel prices across most zip codes.  This database covers a broader period of time than the last few weeks, and the approval process also adds to the slateness of the data.  In the past the IRS has issued mid-year revisions to the reimbursement rate.  While there is no indication that a revision is being contemplated, if fuel prices stay low, a change could be made mid-year.

The reimbursement rate is covers more than just fuel.  Repairs, tires, depreciation, insurance and assumptions about driving levels also are factored into the rates.

Notice 2014-79 from IRS.gov provided guidance on the standard automotive cost reimbursements that can be used under a fixed and variable plan.  A number of companies use these plans in lieu of providing a company vehicle or simply reimbursing at the flat rate.  Under a fixed and variable plan, the driver receives a flat amount every month intended to reimburse for insurance and other non-variable costs.  The variable component is reimbursed based upon mileage for fuel, depreciation, repairs, etc.  I have utilized this type of plan in the past and each driver’s fixed and variable rates were set based upon their location, anticipated driving area and vehicle.

photo credit: Form 1098 via photopin (license)

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