Tax Deduction for Business Mileage
Whether you travel hundreds of miles each week or run occasional office errands, miles driven while in service of your employer are tax deductible. The key to claiming your business mileage deduction is organization and good record keeping. If you are ever audited, having adequate records helps you to justify your deduction claim.
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Standard Mileage Rate
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The amount you are allowed to claim on your taxes changes annually. The Internal Revenue Service sets a standard mileage rate for various types of activities. You may qualify for a deduction under more than one category. As of 2011, the standard mileage rate for business miles is 51 cents per mile. The standard mileage rate for miles driven to relocate for business is 19 cents per mile.
Moving Expenses
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If your employer changes locations or you obtain a new job that requires you to relocate, you can deduct mileage on your tax return. To claim this deduction, you must be employed full time with the employer more than 39 weeks of the year following your arrival to your new job or business location. The deduction is allowed when your relocation is farther than 50 miles from your current residence.
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Travel
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When your job duties include traveling to job sites, meeting with clients or making deliveries in your personal vehicle, you can deduct mileage on your taxes. As long as your activities are directly related to your job duties, you can claim business miles. If you are self-employed, you can claim all miles driven while in service of your company. Avoid personal errands while on company business as they can complicate your mileage calculations.
Employer Reimbursements
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Mileage deductions cover the cost of wear and tear on your vehicle. For that reason, actual costs and mileage cannot be deducted together. If your employer reimburses your vehicle costs or mileage, you are not able to claim an additional deduction. Keep track of your business mileage using a mileage log. This will help you organize your business travel. As your employer reimburses you for mileage, mark off those entries. All remaining entries can be claimed on your tax return.
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