Accurate Advice Newsletter – October 2015

Why to track your miles and 4 Tax Benefits to keeping an accurate mileage log

You may already know you can take a mileage deduction in your personal business, but did you know the IRS requires a mileage log as proof of allowable miles you can deduct on your tax return? If you are audited by the IRS and you do not have a mileage log to prove the deductibility of the mileage included on your return they will remove that deduction from your tax return. Because of this it is very important to keep a good mileage log.

The IRS recommends a good mileage log includes the following:

  • The date

  • Destination

  • Travel purpose

  • Start and stop odometer readings

  • The total miles travelled

Here are 4 tax benefits to taking the time to keep a mileage log.

  1. Business Mileage Deduction

    This one is probably the most obvious mileage deduction. If you have your own business that is reported on either a Schedule C or Schedule F, you can deduct business mileage as an expense against business income.

    It is important to remember that even if you own your own business you cannot include commuting miles in your deduction.

    S Standard Business Mileage Rate for 2015:  57.5 cents per mile

  2. Employee Business Expense Deduction

    You don’t necessarily have to be a business owner to claim a mileage deduction. If you are an employee at a job that requires you to drive your personal vehicle on occasion for work and you are not reimbursed you may be eligible to claim that business mileage as a deduction on your tax return. The deduction will be included on form 2106 with your other employee business expenses and the total included on your Schedule A Itemized deductions.

    Just like the standard business mileage deduction, you can only claim business use miles, commuting is not includable.

    IRS Standard Business Mileage Rate for 2015:  57.5 cents per mile

  3. Medical Mileage Deduction

    Did you know that if you take itemized medical deductions on your tax return you can include medical mileage in your total expenses? This mileage includes things like trips to the doctor, to the hospital and to pick up prescription medicine and equipment. As a bonus you can include parking fees and tolls needed in the travel in addition to the mileage.

    IRS Standard Medical Mileage Rate for 2015: 23 cents per mile

  4. Charitable Mileage Deduction

    You may be aware that you can deduct donations made to charitable organizations. But, many people are not aware that you can also deduct mileage driven while volunteering for a charitable organization. You are allowed to include mileage driven in your personal vehicle for the organization and parking fees and tolls paid as well.

    IRS Standard Charitable Mileage Rate for 2015: 14 cents per mile

If you have questions about tracking your vehicle mileage and the associated tax deductions, call us (541) 689-7071 and one of our tax professionals can help.

We also have FREE mileage log sheets available, they can even be provided via fax or email. They can also be downloaded from our website here: https://abtscorp.com/resources/mileage-log/

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