How to Calculate Government Mileage

Calculating government mileage

Some employees who drive frequently in the course of their business dealings use a company car. But other employees, as well as self-employed people and business owners, drive their own car on business. The Internal Revenue Service publishes a reimbursement rate for miles driven on business, as well as for miles driven for charitable work or for moving or seeking medical care. Your employer might use this rate to reimburse you for business miles on your personal car. If not, you can deduct this mileage on your taxes.

Instructions

1. Look up the most recent standard mileage rates issued by the Internal Revenue Service (IRS). The IRS publishes an update every year to help business owners and the self-employed to calculate government mileage. See References for a link.

2. Determine the most appropriate government mileage rate to use. The government publishes three different mileage rates for business, charitable and medical and/or moving reimbursement. Select the one most appropriate for your situation.

3. Determine the number of miles driven over the last year. You can measure the mileage each time you make a trip, or you can estimate mileage based on a daily or weekly driving routine. Count only the miles you drive for business, charity or medical/moving.

4. Multiply the number of miles driven over the past year by the government mileage rate to get the dollar value of your deduction. For example, if the government business mileage rate is 50 cents and you drove 12,000 miles on business, the calculation for government mileage deductible is: 12,000 x 50 cents = $6,000.

References

• IRS: Standard Mileage Rates