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IRS Mileage Rate

Keep track of your deductible mileage on your vehicle and you could see big savings on your tax return. Remember that you MUST keep accurate records in order for the deductions to be allowed. Listed below are the most common mileage deductions and how you can take advantage of them.

A standard IRS mileage rate applies to each type of deduction. Parking fees and tolls for any of these purposes can be claimed in addition to the mileage.

Medical or Moving Expenses

This includes miles driven to and from doctors and dentists, and trips to the pharmacy to pick up prescriptions. Taxpayers who have moved at least 50 miles during 2011 in order to start work at a new work location in their field of employment may be able to deduct some moving expenses.

  • 19 cents per mile from January 1-June 30, 2011
  • 23.5 cents per mile from July 1-December 31, 2011
  • 23 cents per mile in 2012.

Charitable Purposes

Miles driven for volunteer work and for charitable organizations and functions is tax deductible.

  • 14 cents per mile in 2011 and 2012

The first step is to record your odometer reading on January 1st, and then keep a log or written records of mileage throughout the year. 

Commuting miles, the miles driven from home to an office, are not allowed. Students who are taking courses that are required by their employer, or are work-related, may deduct this mileage at the business mileage rate.

Separate commuting and personal mileage from the mileage driven for business, medical or moving, and charitable purposes. The easiest way to document mileage is to write it all down in a log or notebook.

Job Search Purposes

Mileage expenses incurred while seeking new employment in the same occupation are deductible. The standard mileage rate from July 1, 2011 to December 31, 2011 has been increased to 55.5 cents per mile from 51 cents per mile January 1, 2011 through June 30, 2011.

Business Miles

Mileage driven for business purposes if self-employed or at the request of your employer is deductible. Those who work at two places in one day can deduct the expense of getting from one workplace to the other. Students taking classes that are work-related can deduct mileage to and from class at the business rate.

  • 51 cents per mile from January 1- June 30, 2011
  • 55.5 cents per mile from July 1 through December 31, 2011
  • 55.5 cents per mile for 2012.

Educational Expense (for a job-related education)

If your education qualifies, you can deduct local transportation costs of going directly from work to school. If you are regularly employed and go to school on a temporary basis, you can also deduct the costs of returning from school to home. The qualifying job-related education rate is 51 cents per mile January 1, 2011 through June 30, 2011 and 55.5 cents per mile from July 1, 2011 to December 31, 2011.

Record Keeping Requirements

It is important to keep accurate mileage records for claiming a mileage deduction. The records to keep are:

  • Total miles for the year
  • Mileage for each deductible use
  • Times and dates
  • Place/address
  • Business purpose
  • Charitable purpose
  • Educational purpose
  • Medical purpose
  • Moving purpose

For further information please call to iQTAXX local office professionals.