Another great advantage to itemizing your tax return is the deductions you can receive from claiming your vehicle mileage. There are many reasons that your mileage may be tax deductible. You can choose to take these optional standard rates if you are an employee, self-employed, and all other taxpayers if you have vehicle operating costs that fall into tax deductible categories.
What is Deductible?
Miles Driven for Business
Medical Travel Mileage
Moving Travel Mileage
Servicing for Charitable Organization Mileage
How Much Can I Deduct
50.5 Cents Per Mile For Business
14 Cents Per Mile For Charitable
20 Cents Per Mile For Medical
20 Cents Per Mile For Moving
The rate for business travel has recently increased. It was previously at 48.5 cents per mile for 2007. Due to the current state of the economy the IRS has offered an even higher tax break that will cover mileage rate tax deduction from July 1st, 2008 through December 31st, 2008. The rate for business purposes for this six month window will be 58.5 cents per mile.
The rate for moving or medical purposes for this six month window will be 27 cents per mile. The deduction for charitable travel will remain the same. The reasons for this increase are the higher price with fuel and the increased price of vehicles. The standard rate for business, moving, and medical comes from an annual study that is done to determine the costs of operating a vehicle. The IRS will usually hire an outside company to complete this study.
To learn more about mileage tax deduction rates please visit TurboTax Online. TurboTax Online offers free tax calculators to help you maximize your deductions.
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