Parsley
Sage Rosemary & Ginsburg llp
“always a reasonable result for a
reasonable fee, always”
MEMORANDUM
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To:
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All Partners, Associates and Staff
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From:
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Mike Marget
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Date:
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December 4, 2012
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Re:
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Standard Mileage Rate Increases $0.01 in
2013
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The IRS standard mileage rate for use of a vehicle
in a business will increase by a penny per mile for miles driven in 2013. (IRS Notice 2012-72) For business use of an automobile, the 2013
rate will be 56.5 cents per mile.[i] Driving for medical or moving purposes
similarly increases to 24 cents per mile.
Both rates are one cent higher than for 2012.
These rates are based on annual studies of the
costs of operating an automobile. The
business mileage rate factors in the increased fixed and variable costs of
operating an automobile, while the medical/moving rate is based solely on increased
variable costs.
Since most law firms reimburse partners and
employees for business use of personal automobiles based on the IRS standard
rate and, where permitted, pass those amounts through as costs to clients, it
is important for firm managers to plan for this upcoming change.
Beginning January 1, 2013, it will be important to
distinguish between whether the miles driven occurred in calendar year 2012 or
2013. The one cent increase applies only
to travel occurring after December 31, 2012, regardless of whether the
reimbursement or client billing occurs in 2013.
I’m fairly certain those outfits who audit legal
bills for insurance companies will modify their software to look for this
penny-per-mile difference by travel date.
My advice is to get it right when you process the reimbursements.
[i] Notwithstanding
IRS standard mileage rates, taxpayers always have the option of calculating the
actual cost of using their vehicle for tax purposes. However, extremely accurate records are
required to substantiate such deductions.
Seek advice from your professional tax preparer before traveling this
route.
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