The Internal Revenue Service is the governmental authority that issues standard mileage rates each year. These rates specify the amount per mile that can be deducted from taxable income for business, moving, medical, or volunteer purposes. The rate is the same regardless of the type of vehicle and can be changed mid-year based on studies of fixed and variable transportation cost fluctuations. The rates for the current year can be found on the IRS website, irs.gov.
Business and Education
Traveling in a personal vehicle or business-owned vehicle for business purposes is the most widely used type of mileage deduction. Mileage incurred while commuting between your home and place of business is not allowed, but there are exceptions. If you are traveling between two places of employment or to an educational class that is job related, you can deduct those portions of daily travel. If you are attending a workshop that is a full day, you can deduct the round-trip commute from your home as long as you are not working at your usual place of employment at any time during the day. The standard mileage rate for 2012 is set at 55.5 cents per mile.
Medical or Moving Deductions
The IRS has a number of rules that help reduce the impact of specific situations on the American public. Individuals who must travel to seek medical assistance from doctors or dentists or fill specialty prescriptions can deduct mileage traveling to and from their destination. To help unemployed or displaced workers, mileage incurred during moving can be deducted if you are moving more than 50 miles from your home of record. Reimbursement for both medical related and moving related expenses is 23 cents per mile for 2012.
The third and final category for mileage deductions is services in support of charitable organizations. Mileage incurred while commuting to and from the organization is not a permissible deduction, but mileage incurred during the service period are. Volunteers are eligible for a 2012 deduction of 14 cents per mile.
Deductions for mileage are treated like any other deduction in the eyes of the IRS. Any deduction is subject to audit and requires documentation if any of the deductions are questioned. Individuals who claim mileage can maintain a mileage records in their vehicle. The record should state the date, time, purpose, starting and stopping odometer reading for any mileage that is deducted on taxes. These records can be kept in spreadsheet or paper format; the total of all mileage in each category will be entered in the deduction worksheet.
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