As of January 1, 2017, the IRS has set the standard mileage rates for the use of a vehicle:
53.5 cents per mile for business miles driven, a drop down from 54 cents in 2016
17 cents per mile driven for medical or moving purposes, a 2 cent drop from 2016 (19 cents)
14 cents per mile driven in service of charitable organizations, same as 2016
This deduction may be claimed on your tax return if you used your personal vehicle for your business, medical, moving, or charitable purposes.
However, it is very important to keep a good, detailed driving log (as required by the IRS) to claim this deduction.
Below is an explanation of the possible deductions:
When it comes to business mileage, your commute to work cannot be deducted. Any other driving related to business that is outside your regular commute and required for the business may be deducted. For example: If you are a construction contractor, and you have an office with a desk that you report to every day. While at work, your job requires you to travel to different business sites using your personal vehicle, then back to your office before heading home.You can deduct the business mileage of driving from your office to each and every work site that you drive to and from the work site home as long as your employer doesn’t reimburse you and it is a temporary work site where you are expected to work less than one year. In addition, if you are self-employed, any driving directly related to your business like driving to different job sites, meeting with a client or going to a networking event may be deductible business mileage.
You can claim medical miles for those that you drive to receive medical care, including you, your spouse, and/or your children. To be included as a medical expense, your total medical expenses must exceed 10% of your adjusted gross income or 7.5% if you are 65 and over.
You can claim moving mileage if your move is for a new job. In addition, your new job must be at least 50 miles away from your previous residence, and you start working within the first year you live in your new place for at least 39 weeks (If you are self-employed, the period is two years, during which you have to work at least 78 weeks.) These are called “time and distance” requirements and all 3 must be met for claiming this moving expense deduction.
Charitable mileage is a deduction if the driving you do in service of a recognized 501 (c)(3) charitable organization. Another great reason to volunteer!
Feel free to contact me for tax advice and tax planning!
Lori Merino MBA/EA