There are four major driving purposes that taxpayers can deduct miles for:
- Business
- Medical
- Moving for a job
- Charitable organization
There are two ways of deducting your car on your tax return, if you use it in connection with your business:
- Taking an actual expenses: car payment, gas, oil change, tolls, parking, etc- this method might be beneficial if you lease a car and don’t drive to much
or
- Take a standard mileage expenses, i.e. multiply amount of miles you drove by standard rate. For 2016 this rate went down from 57.5 cents per mile to .54 cents. This is a business rate, so any time you drive from your office to your clients offices, run business errands, going to meet with clients you need to record miles.
Driving from your personal residence to your office does not considered business miles. Unless your primary place of work is your home and you have qualified home office in your residence, than you can start tracking your miles from your garage.
Even though you might not have a business, here is some miles you can still deduct on your tax return:
Miles you drive to have doctor visits are deductible as well at .19 cents per mile ( down from .23 cents in 2015) and are calculated on schedule A ( Itemized deductions) and subject to 10% AGI (see posts about medical expenses), so if you do not Itemize, don’t waste your time tracking those miles
If you moved for your new job, miles you drove in your car are deductible as well. Rate is the same as for medical purposes and is .19 cent per mile ( see Moving Expenses)
The only rate that did not change from 2015 is rate per miles driven in service of charitable organization and is .14 cents per miles. This expense as well calculated on Schedule A- Itemized deductions.
