The Internal Revenue Service allows automobile mileage rates incurred for business purposes. However, many taxpayers do not recognize that these deductions also are permitted for charitable, medical or moving purposes too!
As you begin to gather tax data for the 2014 filing season be aware that you may be entitled mileage rates deductions. Certain limitations apply, but most taxpayers are missing this one!
Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 56 cents per mile for business miles driven
- 23.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. However, this is a rather difficult calculation if you plan on preparing your own income taxes.
For most taxpayers, the deduction will be taken on Form 2106 which then is transferred to Schedule A as part of miscellaneous deductions.
If you’re claiming a deduction for work-related use of your personal vehicle, you can use Form 2106-EZ too as long as you’re claiming the standard mileage rate for your use. However, if you choose to claim actual expenses for your work-related vehicle use, you must use Form 2106. Actual expenses include depreciation and a portion of your auto insurance, fuel, maintenance and repair costs.