| by Roger Chartier: This article is about the 2011 mileage tax deductions for the first half of the year.
NEW!
Besides the mileage rate changes starting in 2011 a taxpayer may use the business standard mileage rate for vehicles used for hire, such as taxicabs. So you can take a business mileage rate deduction for taxicabs. Also. the business standard mileage rate can't be used for more than four vehicles used simultaneously.
You do have to keep mileage records for the IRS tax prep and differentiate between
business,
personal,
charity and
moving miles.
You can take a business vehicle tax deduction with receipts for all expenses or mileage deduction.
For 2011 business miles driven at $0.51 per mile (51 cents per mile) through June of 2011.l
This is up $0.01 from 2010 and runs through the end of June 2011
For 2011 charity miles driven are @ $0.14 per mile. Same as 2010 until the end of June 2011.
For 2011 moving and medical miles driven are @ $0.19 per mile until the end of June 2011.
This is up from 2010
| |
The charity, medical and moving mileage deductions are not as much of an advantage.
You can do straight deductions of all expenses repairs fuel etc. or take the mileage deduction. So let's focus on business here a bit.
The business miles are often the best deduction and considering
price
of gas is going up and down. You never know what gas prices will do. |
If you have a business that logs a lot of highway
miles
like I do at 51 cents per mile it still should be a better method for
2011 (through June).
If your vehicle is paid for and it's expenses for repair and/or maintenance are low it seems that the mileage deduction works best.
Best keep track by both methods so that when tax time comes
you can
do the math and decide which is the better.
Keep a log book to track the odometer readings each day.
I was told how mileage was re-created for one day when they forgot to log the
difference between personal miles and business. They went to a website
that offers online maps and driving directions and mapped out the trip.
Recently a man was audited by his state revenue service and concerning his using the mileage deduction they really rode him hard about exactness and carefull daily record keeping.
He was waiting to hear whether a proposed $2,000.00 fine would be levied on him.
You will find software programs that are very helpful for tax prep and many
people use them. I like to do all of the preliminary record keeping work and
trust my accountant for the details.
Some people think that they don't need to use an accountant because the
electronic filing and tax prep software is so easy to use.
It's probably worth the time and effort to learn about the
ease of use of the software
and decide if you want to
save the cost of the
accountant.
Using
software and e-filing is
another way to save money. Many business people have recommended Intuit Quickbooks.
You also have the option of deducting using the percentage method whereby
you have to save all receipts for parking fees, gas, registration, repairs etc.
If you had a catastrophic year, repair wise, or had to park in a pay garage
everyday
that might warrant keeping all records and possibly using the
percentage
method.
Medical and moving for 2011 allows a $0.19 cent deduction (through June) up from 2010's $0.16.5 per mile deduction. For some it isn't worth bothering with.
For those people who have to travel for dialysis or chemotherapy on a
regular basis, it is vital that they save the money using the
deduction.
The charity deduction @ $0.14 per mile (through June)driven in service of charitable organizations) could be an issue if you did it on a regular basis but again
you have to check the numbers.
The above info can be a make it or break it situation.
If you are self-employed and
just starting out in business for yourself you have to think about this right
away so that your records will be
accurate.
The mileage deduction amounts change every year so be sure to come to visit this site before you start every new year just to know where you will stand.
Good Luck!
See the deductions for mileage incurred in 2009
See the deductions for mileage incurred in 2010
See the deductions for mileage incurred in the second half of 2011
Copyright © Roger Chartier 2010, 2011
Go to
The index of the tax articles on this site
TAX INFORMATION PAGE LINKS
for many more tax saving tips pages.
Notes: This is often referred to as the federal mileage rate., and answers questions about federal mileage reimbursement.
Federal mileage allowance is the topic. Someone spelled it mileage. You ask, what is the federal irs mileage rate standard or IRS mileage rate reimbursement? Read the above.
You do have to keep an irs mileage log. |
