Tax Mileage Rates, or How to make the most of your potential deductions

Written by Wendy Stultz   // July 19, 2011   // 9 Comments

Mile 44 By brand0con

“…And miles to go before I sleep, and miles to go before I sleep.” (Robert Frost)

OK, so my poetry reference isn’t about taxes, but some days it just feels like there is no end to the errands I have to do, or everything that needs to get done. Sometimes it is a lot just to keep everything organized, let alone plan ahead for tax filing.

Quick- how many miles do you drive each day? Are any of those miles tax deductible? With the increases to gas prices over the last couple of years, and MyDolr’s recent coverage of a possible gas tax hike, I decided it was time to remind folks of the possible value of those miles—if you keep good records.

Did you know that the IRS allows you to claim expenses for miles you drive while volunteering? How about to and from doctor visits? How about when you move or relocate? The self-employed folks or those with rental properties should know that the IRS allows mileage expenses for business miles.

Tax mileage rates vary based on the type of miles, so not only do you have to have good records of the miles driven, you also have to have good records for WHY those miles were driven. I suggest either getting a mileage log to keep in your car or printing out driving directions whenever you are going somewhere for tax deductible reasons. And since the IRS updates the mileage rates on schedules other than annually, some years have more than 1 rate based on when you actually drove the miles, like 2011- the IRS just announced this year’s split year rates in Announcement 2011-40.

And even if you drive a lot, you may still not get to claim any of those miles. As with everything else- your tax situation will vary. Not everyone will do better in the long run by using a Schedule A, so if you want the Standard Deduction- at least you don’t have to worry about keeping records for medical or charitable miles, since you won’t be claiming those deductions.

Medical Miles

Miles driven to or from medical appointments, medical treatments, or the like can be included in total medical and dental expenses to determine whether there is any deduction possible on the Schedule A, Itemized Deductions. For 2011, this rate changed effective July 1. All miles driven prior to July are counted at $ .51 per mile, plus parking fees and tolls. July forward these miles are worth $ .55 per mile.

Charitable Organization Miles

Mileage while driving for a charitable organization is allowed as a deduction on the Schedule A, Itemized Deductions at $ .14 per mile (plus parking fees and tolls). Don’t include any amounts for which you received reimbursement. And your Mother always told you it was good to give back to your community- now you have proof.

Moving Miles

This one is a little different as it requires several other factors be met, which go well beyond the mileage discussion and are complex enough to get their own eventual post here. Basically, as to mileage: You get to claim a mileage expense when you drive to your new home (with any dependents). If you are like my family, and plan a vacation as you move cross country- note that you don’t get the mileage for all of your detours or stops, just the mileage from Point A to Point B. You do get the choice of actual expenses or the standard mileage rate, but your actual expenses for gas, oil and mileage only cover the actual moving trip, and not the gas, oil, etc for trips to the grocery store or anything else like that. See Publication 521 for all the gritty details.

Business Miles

Here, you get the choice of using a standard mileage rate (plus parking and tolls) or actual expenses (including things like oil changes, gas, insurance, tires, license plates, etc). Once that choice is made for a particular vehicle- you do have to stick with it, even in future years. This only counts for mileage driven for the self-employment. Folks who have a wage earning job don’t get to count their commute to and from work. And remember that if the vehicle is used outside of the business use, then not all of the actual expenses are going to be business expenses. Business miles driven through June of 2011 are worth $ .51 per mile, then miles driven July 1 or later are worth $ .55 per mile.

*** Please note—whenever parking fees are allowed, parking tickets, speeding tickets, or any other kinds of fines are NOT allowed. Basically- since those were illegal or incorrect activities, the IRS is not going to give you a tax advantage for having participated.

 

Mileage deductions don’t seem like much when you see them like this, but when you consider that these are miles you are driving whether you get the deduction or not, they are definitely worth keeping some records to claim. Again- on my soapbox of record-keeping- please make sure that you have the mileage log, the print outs showing your mileage, or some other verifiable source showing the support for the deductions you claim. This is one of those areas where the IRS loves to audit folks, because it is one area where you either have the proof of your travels or you don’t. There are products on the market to make it easier to log your miles, but none are fool-proof.  Still- if you are willing to commit to keeping good records of miles driven, just as you would keep good records of any other business dealings or of your other tax documents (right?) it can be worthwhile to claim your mileage. But as they say on deal sites and such, YMMV (your mileage may vary).


9 COMMENTS

  1. By dolrdolrbill, September 16, 2014

    Is there a $ amount that you have to get to with deductions before you can claim them? I’m not that savvy with taxes, but I seem to remember one year with mileage and charitable donations, I still did not have enough to qualify for the return.

    Reply
    • By Tax-y Lady, September 16, 2014

      The big picture is whether all of your itemized deductions together (on the Schedule A) would give you a better tax savings than the standard deduction. The standard deduction is based on your filing status (using 2010 numbers $5700 for Single or Married Filing Separately, $11400 for Married Filing Jointly, and $8400 for Head of Household).

      Some of the mileage (especially business miles) are not on the Schedule A, and so are separate and usually on top of any standard or itemized deductions.

      Reply
  2. By Money Hungry, September 16, 2014

    Keeping logs of your mileage is a very good resource to go back to not only for taxes but many things as well. Like the last time routine maintenance was done or how many miles you currently have worn on your tires. It seems to me taxes in this area can be very tricky but if you going to do the work and put in the effort make it worth it. In today’s economy “A penny saved is a penny earned”.

    Reply
  3. By John Dough, September 16, 2014

    I see that the photo associated with this article shows a bicycle. Can you count cycled miles as an expenditure to the IRS? This would be great even if only allotted at half the rate .25 cents. What other modes of transportation does the IRS allow deductions for? All us former skaters might have to X-Games it to work on the 101.

    Reply
    • By Tax-y Lady, September 16, 2014

      Unfortunately, no. The IRS only allows expenses for miles driven, in a car or truck. Airfare and other major carrier expenses may be allowed but under different categories than mileage (such as if train or air travel is required for medical care, a business trip requires a flight, etc.)
      The logic goes something like this- the mileage deduction is meant to cover your expenses for having traveled those miles. Cycling (or walking for that matter) doesn’t have the per mile expense that a car does.

      Reply
  4. By Mark Chen, September 16, 2014

    I appreciate the tip that there is more than one mileage rate for this year!

    Reply
  5. By Ka$h, September 16, 2014

    Thanks for the tips! I am always looking for deductions on my taxes. I did not know about the “Charitable Organization Miles”. I actually do a lot of volunteer work for different charities and I did not know I could be given a tax deduction for that, this will be very helpful to know for this coming tax season! Thanks again!

    Reply
  6. By CM, September 16, 3125

    Are mileage deductions for collecting rent added to and from the location? For example, if my renal property is 10 miles away from my house, do I consider that trip 20 miles?

    Reply
  7. By Nirak, September 16, 3617

    The Medical miles you have are incorrect and are for Business miles. According to IRS Publication 17 2011, the medical standard mileage rates are:

    “The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is:

    19 cents per mile from January 1-June 30, and

    23.5 cents per mile from July 1-December 31, 2011.”

    Also see: http://www.irs.gov/taxpros/article/0,,id=156624,00.html

    Reply

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