How to Calculate Mileage Deductions for a Tax Refund

There are a few reasons why you might be eligible to deduct miles you drive.

There are several reasons why a person may be eligible to deduct some of the mileage he incurs on his vehicle for tax purposes. Some of these reasons are due to business purposes or other work-related expenses. The deductions for work expenses are typically more significant than deductions taxpayers may take for other purposes -- such as medical reasons, moving trips or charitable purposes. The numbers you use to calculate mileage deductions depend on the reasons why you put miles on your vehicle in the first place.

Instructions

1. Keep meticulous records of the miles you drive for different purposes. Each time you drive for business purposes, charitable reasons, medical reasons or charitable purposes, you may be eligible to deduct mileage. Mark on your records the number of miles you drive on each eligible trip and the purpose of the miles you drove.

2. Write down the total number of business miles you drove during the year. These miles include miles you incurred while on business trips or while making trips to far away or local locations for business purposes. It does not count miles between your home and your workplace. As of September 2011, the standard mileage deduction for business expenses was 55.5 cents per mile. Multiply the number of business miles you drove by the standard mileage deduction to calculate the total amount you may deduct for business miles.

3. Write down the total number of charitable miles you drove during the year. These miles may include miles you drove while taking a church youth group to a retreat or miles incurred while driving to volunteer at a service organization. Multiply the total miles driven by the allowable deduction for charitable miles, which was 14 cents per mile as of September 2011.

4. Write the total number of miles you incurred while traveling to and from hospitals or medical appointments. Multiply this number by the allowable rate for medical purposes, which was 23.5 cents per mile as of September 2011.

5. Write any moving expense miles you incurred during the year if you took a new job and were required to move at least 50 miles from your current residence. Multiply this number by the allowable amount, which was 23.5 cents per mile in September 2011.

6. Add the totals from steps 2 through 5 to calculate the total mileage deduction you may take when you file your taxes. You must itemize your deductions when you file your taxes to take this deduction.

References

• IRS: Standard Mileage Rates
• Turbo Tax: 2011 Standard Mileage Rates Announced