How to Deduct Mileage on Taxes

Video Transcript

"Hi we're here to talk about how to take mileage deductions on your income tax. The first thing you need to do is obviously they have got to be business related or you can't take them as a deduction but the first thing you need to do is to keep a good record of the miles that you log. Most people will pick up one of these small record books from their office supply store and each day as they make a trip they'll log it in to their reason for the trip, how long the trip is then at the end of the year it just becomes a simple matter of summing up the total number of business miles you have traveled and you'll take those to a worksheet that is in the instruction book for your depending on if you are filing a schedule c for sole proprietor or a 1065 for partnership or an 1120 or 1120S for an S corporation. There will be a worksheet in your instruction manual which you will plug in the total number of miles and take the cost per mile that the IRS allows you. Typically it is 50 some cents a mile. The 2008 rate is 58.5 cents per mile for business travel and you'll take that times the total number of miles you have traveled and come up with a monetary figure that will be transferred from the worksheet into the auto expense category on your tax form."