IRS Mileage Reimbursement Rules
The Internal Revenue Service allows tax deductions for miles driven if the mileage is related to business, charity or health care. Mileage deductions are an itemized deduction, meaning you can only take the deduction if you do not take the standard deduction. When calculating your deduction, subtract any reimbursement you receive for driving those miles. For example, if you are deducting business miles and your company reimburses you 30 cents per mile, lessen your deduction by the reimbursed amount. The rates for the different categories of driving differ, are set each year and adjusted for the cost of maintaining and operating a motor vehicle.
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Business Miles
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If you work as an independent contractor, have to drive from one job to a second job or have to drive as part of your job, you can take a deduction for those miles. You cannot deduct the miles you drive from your home to your primary place of work. Also, if you are seeking a new job in the same field as your last position, you can deduct miles driven for job-seeking purposes, such as traveling to interviews and job fairs, at the same rate as business miles. The standard business mileage deduction is 50 cents per mile for 2010, and 51 cents per mile for 2011.
Medical Miles
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If you drive yourself or a dependent to get to medical care, you can take a deduction for those miles. You can also deduct any tolls or parking fees that you pay on your trip. The standard medical mileage deduction for 2010 is 16.5 cents per mile. This deduction received a significant increase for 2011 to 19 cents per mile.
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Moving Miles
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In order to qualify to deduct moving miles, you must meet several conditions. First, your move must be job related. You must start working at your new job within one year of your move. Second, your new residence must be closer to your job than your old residence. Third, your new job must be at least 50 miles farther away from you old home than from your old job. Finally, you have to work full-time for at least 39 weeks out of the first 52 weeks that you live in your new location. For example, if your old home was 4 miles from your old job and your new job is 70 miles away from your old home, you pass the distance test. Moving standard mileage deductions are the same amounts as the medical mileage deductions for 2010 and 2011, 16.5 and 19 cents per mile, respectively.
Charity Miles
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If you drive your car to get to a volunteer activity or as part of your volunteer work, such as delivering presents to needy families, the IRS allows you to take a deduction for those miles, even though you cannot deduct the value of the work that you do. The standard mileage deduction for charity miles is the same for both the 2010 and 2011 tax years: 14 cents per mile.
Record Keeping
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In order to claim the deduction, you must keep accurate records of how you have used your car. For each trip for which you plan to deduct mileage from your taxes, you should record the date, time, purpose and distance. This will also allow you to easily calculate your deduction at the end of the year.
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References
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