Driving is something nearly every American does with regularity, and there are many costs typically associated with this. Fortunately, when it comes time to pay taxes, some of these costs could be written off, at least in certain circumstances. For this reason, consumers who drive a lot might want to look into whether they will be eligible to deduct some of those expenses, which could add up to big savings over the course of the year.
There are four standard types of driving that can lead to consumers writing off their mileage: Work, charity, moving, and medical. However, the rates for each one in the 2014 tax year will vary, and there are a number of qualifications that typically have to be met for any mileage costs to be deducted.
A closer look at claims
First and foremost, business mileage can be deducted from a tax filing in one of two ways. Companies can either take the standard deduction for the entire year, which is based on the various costs of operating a vehicle, or they can deduct their actual mileage, at a rate of 56 cents per mile. For this reason, companies should try to do the math and determine whether the standard deduction, or the one for their actual miles traveled, will end up being more valuable.
Meanwhile, when it comes to individuals, they can also claim the 56 miles per gallon when they drive their own cars for work (though again, certain restrictions will almost certainly apply). But there are other kinds of deductions for mileage they can claim as well, just at lower value per mile. For example, when driving for medical purposes, people can claim 23.5 cents per mile. Deductions per mile for moving also totals 23.5 cents. And when driving while helping charitable organizations, the deduction is 14 cents.
Of course, the ins and outs of the tax code can be extremely difficult to navigate for most consumers, and as such it might be wise for them to take their concerns to tax preparers who can help them deal with these things throughout the year. The more that can be done to prepare for tax season farther out from the filing deadline, the better off consumers are likely to be in terms of keeping their obligations as minimal as possible, and maximize their potential refunds.