The Tax Write-Off for Miles
The Internal Revenue Service allows you to deduct many expenses from your taxable income. If you incur expenses driving, in some cases you may deduct mileage expenses from your taxable income. In most cases, the IRS allows you to choose from the standard mileage rate or the actual expense method to calculate your deduction.
As of 2012, the IRS allows you to deduct 55.5 cents per business mile you drive. Although this mileage must be business-related, the IRS definition of "business" is broad. You may, for example, deduct the cost of traveling from one workplace to another. If you are a student, you may deduct the cost of attending work-related classes. You also may deduct job search mileage expenses, as long as you are not seeking your first job and you are looking for work in the same occupation. You may deduct mileage expenses, at 23 cents per mile, for moving more than 50 miles to take a new job in the same occupation.
If you perform volunteer services for a nonprofit organization qualified under Section 501(c)(3) of the Internal Revenue Code, you may deduct mileage expenses to the extent that you were not reimbursed for them. The standard mileage rate, however, is different -- as of 2012, only 14 cents per mile. Most nonprofit churches, hospitals, scientific research institutes and colleges qualify under 501(c)(3). If your mileage expenses were incurred incidental to employment with one of these organizations, you may deduct your mileage at the business mileage rate.
You may deduct mileage driven for medical purposes from your taxable income. Eligible trips include trips to and from the doctor or the dentist, and trips to hospitals and pharmacies to pick up medicine. The standard mileage rate for medical expenses is 23 cents per mile as of 2012.
The Actual Expense Method
You may choose to use the actual expense method instead of the standard mileage rate. In fact, you cannot use the business mileage rate for more than four vehicles on the same tax return, or if you claim certain types of vehicle depreciation. Under the actual expense method, you may include expenses for fuel, maintenance, parking, tolls and auto loan interest. You calculate deducible auto loan interest by subtracting from your interest the percentage of the time your vehicle is used for non-business purposes. If you use your vehicle for business purposes 80 percent of the time, for example, you may deduct 80 percent of your auto loan interest.
Keep careful records of your mileage expenses in case the IRS audits you. Record your odometer readings for each deductible use of your vehicle, the dates and times of your travel, the places you traveled to and from, and the purpose of your travel. It might also help to keep evidence such as fuel receipts and parking tickets.
David Carnes has been a full-time writer since 1998 and has published two full-length novels. He spends much of his time in various Asian countries and is fluent in Mandarin Chinese. He earned a Juris Doctorate from the University of Kentucky College of Law.