| by Roger Chartier: This article is about the 2011 mileage tax deductions for the second half of the year.
The new rates start on July 1, 2011
NEW!
Besides the mileage rate changes starting in the second half of 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 starting July 1, business miles driven at $0.55.5 per mile (fifty-five and a half cents per mile)
This is up $0.045 (four and a half cents) from the first half of 2011 and runs through the end of December 2011
For 2011 charity miles driven are @ $0.14 per mile. Same as 2010 and the first half of 2011 and runds until until the end of December 2011.
For 2011 moving and medical miles driven are up from $0.19 per mile to 0.235 (twenty-three and a half cents) until the end of December 2011.
This is up from the first half of 2011.
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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. |
Businesses that log a lot of highway
miles
will consider that at 55.5 cents per mile it still should be a better method for
2011 (through December) unless you bought expensive new vehicles or had outstanding repairs.
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.
If you keep track throughout the year of all expenses and mileage you can do the math and decide which is best for you.
Keep a log book to track the odometer readings each day.
There are nice devices made now that can keep track of mileage as well.
Fines can be heavy for bad record keeping.
You canl find tax preparation 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. There are some quick ways to do tax preperation with software.
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 could deduct using the percentage method. In that case
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.
If you travel to a far away city for medical treatments on a regular basis or are moving cross country it could be a great idea for you to take 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.
Be sure to check back with this site for new updates on mileage and other important tax info.
Good Luck!
See the deductions for mileage incurred in 2009
See the deductions for mileage incurred in 2010
See the deductions for the first half of 2011
This page Copyright © Roger Chartier 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. |
