IRS gives 14cents per mile for charitable causes (business is about 50 cents).
I believe that it includes gas and wear/tear.
But gas seems to cost about 10 cents/mile for a mid size car. Is it just 4 cents/mile for wear and tear?
Without going into a detailed mathematical calculation, how can we estimate the wear and tear on a car per mile? For example:
25k to buy a modest new car
10k in maintenance over its life
150k miles over the car’s life
=$0.23 per mile for wear and tear alone
@sciconf I use the 3 way split to guestimate. 1/3 each for fuel, depreciation, and maintenance/repairs.
For 50 cents a mile on average that would work out to about 17 cents for gas, and the same for the upkeep. For an economy car the gas figure would be a lot lower, but the fed’s 14 cents is crazy; I would not want to use my car for such a purpose. Recently, it barely covered the gas cost. And I’m no counting any additional insurance cost where applicable.
The lifetime repair and maintenance cost for our 1994 Nissan Sentra was $10,110 over 18 years of ownership and 133,000 miles of driving, giving 7.6 cents per mile. That figure is typical; the average US driver spends $1100 per year or so on these same items or 7.3 cents per mile for 15,000 miles per year of driving. That would only leave less than 7 cents per mile for fuel.
That is not a bad estimate you outlined. You are assuming the car has zero value at 150k miles. That isn’t true. Its value depends on many many things. Lets assume its worth $3000 at 150K dropping your estimate to 21 cents/mile.
It varies greatly on the car you choose, where you live, how you drive and how well you maintain your car. That might not be a bad estimate for a Corolla or Civic but way off for a Mini based on the histories of each. They real key is the $10K breakdown.
2 sets of tires $1000, 2 sets of brakes $1500, 20 oil changes $1200, Wiper blades $120, 2 Timing belts (for cars that need them ) $1400, water pump $200, fuel pump $400. 3 Coolant changes $300, 2 Trans fluid changes $250. That’s $6370 right there. Many would increase the frequency oil, coolant and trans fluid changes but it is close. That shows me 19 cents/mile for a generally high quality, high reliability car.
So business deduction is now $0.56/mile which includes gas and insurance costs, charity is $0.14/mile which doesn’t even cover wear and tear, let alone gas and insurance. Go figure.
Here is what the IRS has to say;
"The business, medical, and moving expense rates decrease one-half cent from the 2013 rates. The charitable rate is based on statute."
It is written into the tax code at 14 cents/mile and hasn’t changed for a long time.
There is an alternative way of deducting the mileage;
“The 14 cents per mile charitable rate is optional. Instead, a volunteer can deduct actual variable costs of operating the car for volunteer purposes. These include gasoline and oil and all taxes thereon. They do not include general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance”
Not sure which would give a higher deduction but I know which is harder to keep track of…
The deduction for medical travel is 23.5c/mile, and is supposed to be based on direct operating costs. The deduction for business use of car is 56c/mile and is based on ALL costs (except tolls and parking): depreciation, maintenance, repairs, fuel, insurance, etc.
You also have the option of taking actual expenses…though you’ve got to pick one and stay with it: no switching back and forth every year!
Actually I always used to figure about 7 cents for fuel and about 3 for maintenance. When I was cleaning my office I found the figures for my Olds where I did a complete cost per mile analysis. Can’t remember where I put it though. I believe the 14 cents though is just to cover the variable per mile costs, not major repairs and depreciation since you are unlikely to have a car just for charitable work and unlikely to experience repairs just from the charity driving. I don’t know exactly what wear and tear would be. Tires and brakes are maintenance to me and transmissions are repairs.
For what purpose?
For the purposes of tax deductions, it’s all defined anyway.
For academic purposes, wear & tear will actually vary wildly depending on driving environment. A ten year old car with 120,000 miles in Oklahoma has a very different “wear & tear profile” than a car with the same age & mileage in Boston… or NYC.
Actually I always used to figure about 7 cents for fuel and about 3 for maintenance.Dang! What do you drive?
I always figured 25c/mile for the truck. Now that I got a few bucks together, I went and bought a small car (Cobalt), and I budget 15c/mile for it. (Recently lower…those prices are based on $3.70-ish gas.)
7c/ mile means you were getting 53MPG then, and/or 43MPG now! What car gets that combined? A few older econoboxes might eke out 43 on the highway, but would struggle with city driving. The only car I see achieving those numbers in mixed driving is a Prius, or maybe the old Insight. (Or just maybe you have a vintage diesel Rabbit?)
OK, you made me curious so I dug up my old figures. You’d have to adjust to todays dollars since this was on an 81 Olds diesel that I ran up to 480K. I think I did it because I was driving 100 miles a day or more and my wife was hounding me to get a new car instead of continuing to drive the old one. So I spent an afternoon looking at my marginal and average repair and maintenance costs for every 10,000 mile increment from zero to 340,000. They don’t include fuel which I used to figure 7 cents a mile and now 10 cents, or insurance, license etc. since you’d have that with anything.
So summary, maintenance and repairs: 0-100K=.01, 100-200=.02, 200-300=.03 and pretty much leveled off at .03 per mile after 300,000. So with fuel that would be .08 to .10 cents per mile up to 300,000. The car itself was $10,000 so the cost per mile for the car at 300,000 was another .055 per mile. I didn’t think that was too bad. So total average cost per mile with fuel and the car itself was $0.155 per mile. Of course doing most of my own work.
I also did my 86 Park Ave up to 60,000 miles. That one was a penney and a half for maintenance and repairs because it had a 50K warranty on it but the car cost was double at .23 per mile. So with fuel was about .35 per mile up to 60,000 miles.
I had similar experience with later cars, just adjusted for inflation but still they were profit centers when I’d get paid 40 cents a mile for my driving tax free.
So at any rate, I think the IRS is just providing enough to cover fuel and a little for maintenance like I said before.
@Bing My cost per mile includes maintenance, repairs and tires. That’s the way the AAA figures it as well. The 7 cents per mile or so in my case is based on 18 years and relatively low miles per year, which drives up the cost per mile.
The USA average figures of $1100 per year based on 15,000 miles of driving is also representative. The lowest cost would be incurred by driving very high miles per year in a very simple and reliable car, such as a Toyota Corolla.
For repair and maintenance costs for a car 5 years or older I’ve always figured about $1000 per 10,000 miles driven, 10 cents per mile I guess.
@GeorgeSanJose Right, I include the first 5 years during which there are fewer repairs and replacements, which would lower the overall cost per mile. For my 1988 Caprice, the figure came to $11,900 over a 19 year (1988-2007) period and 138,000 miles, giving 8.6 cents per mile.
As cars went, this was considered a good vehicle; numerous taxi and police organizations used them. It was certainly reliable.
@sciconf, you know you can correct typos in your thread title.