Deduction for Driving?

Did you know the IRS allows for deductions for driving your personal vehicle?

If you are self-employed, drive for the benefit of your employer and are not reimbursed, drive for medical or moving purposes, or drive for charitable activities, you may be allowed to received a deduction for the use of your vehicle.

In 2009, the mileage rates were as follows: 55 cents for business, 24 cents for medical or moving purposes, and 14 cents for charitable purposes. The rates effective January 1, 2010 are 50 cents for business, 16.5 cents for medical or moving purposes and 14 cents for charitable activities.

These rates are used in lieu of tracking actual expenses related to the operation of a vehicle, such as fuel, repairs and maintenance, and depreciation. In addition to using the mileage rates, you may also claim parking and toll fees in addition to these expenses as separate items for deductions.

In order to claim the deductions, you must be able to substantiate the number of miles driven as well as the purpose of the trip, such as banking, post office, meetings with clients or potential clients. Our firm recommends the use of mileage logs available at many office supply stores at a very reasonable price.

These rules will generally apply in most situations. There are certain exceptions that we will be more than happy to discuss with you.

Please give our office a call at (615) 746-4632, if you have any questions regarding this or other tax-related issues.