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4 Things You Need to Know About US Mileage Deductions

Rotem Rubnov

• 2 min read
4 Things You Need to Know About US Mileage Deductions
Photo by Kelly Sikkema / Unsplash

If you're anything like me, you drive a lot. Do you also know that some of these trips can be deducted from your income tax? This can be done through the use of the IRS Mileage rate.

1. What is the IRS Mileage rate?

The IRS Mileage rate is rate which helps you to calculate the amount you may deduct from your taxable income for all business-related mileage. The rate can be applied to several types trips you took throughout the year and is counted per mile. If you sum up the total distance of your business-related trips, multiply the result with the mileage rate, you get the value of your deduction.

2. How much can I deduct?

For business-related trips IRS standard mileage rate is 57,5 cents / mile, as of the 2015 tax year.

Every year, the IRS adjusts the rate, based on current costs of vehicle operation, fuel and tax burdens. The rate is effective for the tax year you completed trips in. For example a trip in 2016 January will count as part of the 2015 tax year, since tax day takes place on the 15th of April 2016.

Business or Clergy 57,5 cents / mile
Medical or Moving 23 cents / mile
Charity 14 cents / mile

For the latest IRS mileage rates head over to our updated post.

3. What types of trips can I deduct?

It's important to keep in mind, that not all types of driving can be deducted. The trip which you may claim are the following:

  • Trips between your office and a second place of business
  • Trips visiting a client at an office or job site
  • Trips to a meeting at your office of job site
  • Trips for errands or supplies
  • Trips to entertain/dine clients
  • Trips to temporary worksites
  • Trips to airports
  • Trips for the purpose of job search
  • Trips to odd job locations
  • Trips taken by clergy on church-related business

4. How do I keep a log of my trips?

You can manually scribble down all of your trips on a notepad, then copy everything to a spreadsheet in order to submit to the IRS. There's a much better way to do this, however. Psngr app for iOS or Android automatically logs your trips including full map traces and all details required for your mileage tax-deduction report.

Sources:
IRS (https://goo.gl/dW23KQ)
(https://goo.gl/f1htI2)