Federal Mileage Reimbursements



Image Provided By OpenSource-Art.org
When using a privately owned vehicle for work, the IRS offers deductions.

Just imagine a new/used vehicle fully paid for within a year, or two.

It is always suggested that consulting an IRS/tax agent for all of tax-related information is preferred, but the following three sections provide a quick idea of the IRS vehicle reimbursement program.

NOTE: The information in this article was based on the US IRS rules and regulations when this article was written and is subject to changes at the IRS's discretion.

Eligibility:


Image Provided By OpenSource-Art.org
A car for a small-business owner, or someone who is self-employed, can deduct the mileage from traveling from one business location to another. The mileage deductions can only be taken if there are itemized deductions, rather than taking the standard deduction. Itemized deductions are filled out on form 2016. Since it is a miscellaneous deduction, it must be greater than 2 percent of an adjusted gross income. Choose whether to deduct actual car expenses, or the standard mileage rate.
Car expenses and use of the standard mileage rate vs. actual car expenses are, explained in Chapter 4 of Publication 463, Travel, Entertainment, Gift, and Car Expenses

Calculate the Deduction:

The per-mile rates change every year, and are usually announced every November for the following year. So the rate for 2009 taxes would have been announced in 2008.


Image Provided By OpenSource-Art.org
For 2009, the rate for business travel is 55 cents per mile, the rate for medical or moving purposes is 24 cents, and the rate for driving for charity organizations is 14 cents. For 2010, the rate for business travel is 50 cents per mile, the rate for medical or moving purposes is 16.5 cents, and the rate for driving for charity organizations is 14 cents.

Multiply the number of qualifying miles you have driven by the appropriate rate to get the deduction you are eligible to take. For example, if during the year 2009, you drove 1,000 miles for business and drove 100 miles for charity, you would multiply 1,000 by 55 cents and 100 by 14 cents, so your total deduction would be $564.

News about mileage rates:

  1. IRS Announces 2009 Standard Mileage Rates
  2. GSA lowers mileage reimbursement rate for 2009
  3. 2010 IRS Mileage Rate drops 9% from 2009 Level
  4. Current Mileage Rates

Claiming a Partial Deduction:


Image Provided By OpenSource-Art.org
If an employer reimburses for the mileage, there is a possibility of a smaller deduction. If the per-mile reimbursement from the employer is less than the IRS mileage rate, deduct the difference. For example, if an employer reimburses 33 cents per mile and the current deduction is 55 cents, subtract 33 cents from 55 cents and the deduction is 22 cents per mile.

NOTE: The information in this article was based on the US IRS rules and regulations when this article was written and is subject to changes at the IRS's discretion.

If you have any negative/positive feedback that you would like to share, regarding any this article, please feel free to email me at Articles@McClainSolutions.com


« Back


McClain Solutions, LLC © 2010 - 2013