Gas prices remain high and continue to pinch the pockets of many commuters. Yet, the IRS has not budged when it comes to increasing the standard mileage rate that many commuters rely on when it is time to claim deductions on their tax return. Currently, you can deduct 51 cents per mile for business travel, 19 cents per mile for moving or medical travel and 14 cents per mile for charitable deductions.
History is in your favor?
Historically or at least the last two times gas prices rose so drastically (i.e. in 2005 and 2008), the IRS raised the standard mileage deduction rate to 58.5 cents per mile. However, this time around IRS officials seem reluctant to change the rate because changing the rate during the year could cause many logistic problems and they are concerned with the risk that gas prices may fall which could leave the IRS with the responsibility of changing the rate again. Given these concerns, we wouldn’t expect much of a break this year.
Not Familiar with the Standard Mileage Rate Deduction?
Essentially the standard mileage rate deduction is for instances in which you drive your personal car for business, medical reasons, or in support of a charitable organization. The mileage rate deduction is claimed as an itemized deduction on your tax return if you are itemizing for the year. Remember, you can either itemize deductions or take the standard deduction. Also, please note that you likely cannot take this same deduction if you are using a business vehicle for these purposes; it is just for personal vehicles.
More Vehicle Tax Deduction Questions? Browse Answers or Ask a Tax Expert
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