Understanding IRS Mileage Rates

If you’re using a vehicle for work-related purposes, you may be able to claim your mileage on your tax return. Each year, the IRS sets mileage rates that you may use to calculate your deduction. Read on to learn more about IRS mileage rates and whether your mileage qualifies.

Determine Whether Your Mileage Qualifies

Not all mileage qualifies for a mileage deduction. If you drive your vehicle for work, you can claim mileage if you do not receive travel reimbursement from your employer. If your employer does provide reimbursement, even if it’s at a rate lower than the IRS mileage rate, you may not claim the mileage on your taxes.

Segment Your Miles by Type

In addition to business mileage, you may be able to claim miles for other types of driving. You can claim mileage for medical and moving purposes, but this mileage rate is lower than that for business miles. You can also claim mileage for miles driven for charitable organizations.

You may have a combination of miles to claim, so make sure that you segment them properly. You will want to keep track of your miles throughout the year, rather than try to remember them or make an estimate at tax time. A spreadsheet or mileage tracking app can help you stay on track.

Apply the Deduction

When you file your taxes, you will apply the mileage deduction by multiplying the number of miles driven by the applicable rate. This number is your mileage deduction. Your tax reporting software or CPA will show you how to make this calculation and where to enter the deduction.

Learn How the Tax Act Makes a Difference

Changes to tax law in 2018 may impact whether you can claim your miles and place other limits on your mileage claims. Certain travel expenses that may have once been claimed are no longer deductible per the Tax Act changes. Additionally, moving expenses associated with an employee move might not qualify. It’s important to understand how these changes impact your tax situation specifically.

Talk to a CPA

Ultimately, the best person to help you understand your IRS mileage deduction is your CPA. You can try to work your way through your taxes with reporting software, but if you have multiple questions about mileage and other deductions, a tax professional is the best person to help. You’ll want to gather all of your information before contacting a CPA and ensure that everything is well-documented so your preparer can help you report things accurately.