What Is a Mileage Reimbursement Amount?

A mileage reimbursement amount is the rate at which the Internal Revenue Service allows individuals to deduct for operating a motor vehicle for non-personal purposes. The IRS gives taxpayers the option to either keep records that show all costs associated with the vehicle and proof of how often the vehicle was used for business purposes to deduct the actual costs or to take the standard deduction. There are several categories for which mileage can be deducted, each with its own standard mileage-deduction rate.

Business Mileage

The largest mileage rate is for business miles. These are miles you drive between jobs, from a college or university where you are taking classes to a place of employment, or for job-related activities, such as driving to meet with a business associate. The miles you drive commuting from your house to your job do not qualify. Each mile driven results in a deduction of $0.55, so if you drove 800 miles in 2009, you could deduct $440.

Limits on Business Deductions

If your company reimburses you for vehicle expenses, you may be able to take a partial deduction for your business miles or you may not be allowed to take the deduction at all. To figure out what you can deduct, determine the per-mile rate that your company reimburses you. Subtract this number from the current IRS mileage rate. If the result is greater than zero, that is your per-mile deduction rate. If it is zero or less, you cannot take the deduction.
For example, if your company paid you $0.33 per mile that you drove for company purposes in 2009, you would subtract that from the IRS rate of $0.55 per mile and find that you could deduct $0.22 per mile for business miles driven.

Moving and Medical Mileage

The IRS allows taxpayers to take a deduction based on the number of miles they drive to move or get to medical care. To take a deduction for miles driven for medical purposes, you must be driving yourself, your husband or wife or a dependent. You also can deduct any tolls or parking fees you paid.
To qualify for the moving mileage deduction, your new job must be located more than 50 miles away from your old house and you must work full-time for at least 39 weeks of the year following your move and 78 weeks in the next two years. Both of these deductions are taken at the rate of $0.24 per mile.

Charitable Miles

If you drive in the service of a charity or to a location to perform charity work, you may take a mileage deduction for the distance you drove at the rate of $0.14 per mile. However, you cannot take a deduction for the value of the work that you perform. For example, if you deliver food for Meals on Wheels and you drive 400 miles a year, you can deduct $56.

Record Keeping

Though it is much simpler to keep track of miles for the standard deduction rather than totaling all of the costs of owning and maintaining your vehicle, you still must keep careful records to verify your mileage claims. You need to record the date and time of your trip, your departing location and destination, the purpose for each trip and the distance.

References

• IRS Mileage Rates and Information
• Mileage Allowance Explanations
• Moving Mileage Deduction Eligibility