If you are an employee and your job requires you to do some traveling using your personal vehicle, federal tax law allows you to claim a deduction for the business mileage if you're not reimbursed for the expense. If your employer does provide you with a reimbursement or allowance for business related travel, you may still be able to take a deduction depending on the type of reimbursement policy used by your employer.
Federal tax law permits two optional methods to calculate your mileage expenses when using a personal vehicle for business-related purposes. The first option involves using actual expenses including depreciation, licenses, gas, oil, tolls, lease payments, insurance, parking fees, registration fees, tires, and repairs. The deduction you claim is based on the percentage you use your vehicle for business purposes multiplied by the actual expenses paid.
The second method available to taxpayers is to multiply the miles you drive for work (not including commuting) by the Internal Revenue Service's (IRS) standard mileage rate, which changes annually. The mileage allowance deduction replaces separate deductions for lease payments (or depreciation if the car is purchased), maintenance, repairs, tires, gas, oil, insurance and license and registration fees. However, the taxpayer can still claim separate deductions for parking fees and tolls connected to business driving.
The IRS recently issued IRS Notice 2016-79, announcing that the optional mileage allowance for owned or leased autos (including vans, pickups, or panel trucks) will decrease by 0.5 cents to 53.5 cents per mile for business travel after 2016. The 53.3 cent rate can also be used by employers to provide tax-free reimbursements to employees who supply their own autos for business use, under an accountable plan, and to value personal use of certain low-cost employer-provided vehicles.
The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under Code Section 170.
The standard mileage rate is 17 cents per mile for use of an automobile (1) for medical care described in Code Section 213, or (2) as part of a move for which the expenses are deductible under Code Section 217.
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