2015 Standard mileage rates are up!
Nannies and families, take note: The IRS has announced that the business reimbursement for business travel has gone up!
Gas has been going down radically, and Costco’s posted rate today is $1.65. We’re all saving money every time we fill up. However, the IRS has announced that for business mileage, their rate has actually gone up slightly. Last year the rate was 56.5 and the new rate for 2015 is 57.5.
So you may be wondering why families will be paying more for errands their household staff run. Medical mileage as well as driving for volunteer work has stayed lower.
Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
The way the IRS sets the standard mileage rates is based on an annual study of the fixed and variable costs of using a car, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.
Why is the business rate up and the moving and medical rate down? The business rate adjustment takes into account all the costs associated with owning a car, including insurance and repairs, while the other adjustment primarily takes into effect oil and gas costs.
There is another option. The standard rates are the simple option for taxpayers to use. The other option is to claim deductions based on the actual costs of using a vehicle. In either case, you need to keep records to prove how far you drove and when and for what purpose.
Be sure to use these new rates to reimburse your nanny or household manager starting this month!