Don't forget mileage deductions at tax time

People who use their own car or other vehicle for business purposes can deduct a variety of expenses, including mileage, at tax filing season.

For the current filing season, the standard mileage rate now stands at 55 cents per mile. People also have the option of deducting their actual car expenses. The IRS Web site notes that these guidelines apply to automobiles, vans, pickup trucks, and panel trucks.

Those who choose to deduct actual expenses as opposed to the standard mileage rate can report depreciation of the vehicle, as well as gasoline and oil, any applicable lease payments, insurance, and registration fees.

Taxpayers will also find that they can only deduct a certain portion of their vehicle costs if they drive it for both business and personal use. For example, the IRS cites the example of a sales representative who drives their vehicle 12,000 miles per year for business and 8,000 for personal use. Under that formula, only 60 percent of a vehicle's operating cost is deductible.

Also, limits apply on what can be deducted from expenses involving employer-provided vehicles. For example, taxpayers must generally be self-employed to deduct interest on car loans, while personal property taxes can generally be deducted on employer-provided vehicles if a taxpayer itemizes.

Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.
Posted To: Tax Ranger's Blog By: Tax Ranger On: Wednesday, February 10, 2010
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