Liberty Tax Urges Good Recordkeeping Practices for Deductible Mileage

 

Press Information
For Immediate Release
June 28, 2011 
   

 

 
CONTACT: Martha O’Gorman
Chief Marketing Officer
(800) 790-3863 ext. 8022
martha@libtax.com
 

 

Liberty Tax Urges Good Recordkeeping Practices for Deductible Mileage
IRS Increases Mileage Rates July 1
 
 

(Virginia Beach, VA)  Gas prices have made it difficult for many Americans across the country to afford transportation costs, prompting some to cut back on other necessary expenses, such as groceries and utilities. In response to the rising fuel costs, the Internal Revenue Service announced it will increase the standard gas mileage rates for the remaining six months of the year. 

The tax agency will increase the standard gas mileage rate by 4.5 cents to 55.5 cents per mile, which will go into effect on July 1, 2011, and remain in place until December 31, 2011. Individuals who use their personal vehicles for business purposes, as well as other taxpayers who are eligible for mileage deductions, may benefit from this increase during filing season. 

“The IRS considers business mileage those miles driven from the office to an auxiliary business location,” said John Hewitt, CEO of Liberty Tax Service. “Commuting miles, the miles driven from home to an office are not allowed.  Students who are taking courses that are required by their employer, or are work-related, may deduct this mileage at the business mileage rate.” 

Typically, individuals can claim mileage deductions in four primary categories: business, medical, relocation and charitable purposes. The standard mileage for individuals who claim the deduction for business purposes will increase from 51 cents to 55.5 cents. Additionally, Americans who claim mileage expenses for medical or relocation costs will be able to claim 23.5 cents per mile for the latter half of the year, as opposed to the standard 19 cents. However, the mileage rate changes will hold steady at 14 cents for the charitable category. 

Gas mileage rates are computed based on a combination of gas prices, depreciation, insurance and other types of fixed and variable expenses. The IRS said the temporary increase is largely the result of high gas prices. 

Good recordkeeping practices are required to document your deductible mileage, and separate it from commuting and personal mileage.  Be sure to document this mileage by keeping a log or other written record.

  

 

About Liberty Tax Service     

Liberty Tax Service is the fastest-growing retail tax preparation company in the industry’s history.  Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 8,000,000 individual income tax returns.  With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.    

Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start,and ranks #1 of the tax franchises on the Entrepreneur “Franchise 500.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax.  

 

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