by Catherine Rein
(last updated May 28, 2009)
Whether you own your own business and need to drive to visit customers or use your personal car part of the time for business use, the IRS allows the deduction from your taxes in the form of a mileage allowance. Keep in mind that in order to use this deduction you'll have to itemize and you're only able to deduct the cost of the car's business use.
The IRS mileage allowance is only for cars that are owned or leased by the taxpayer. Also, you can't use it if you operate five or more vehicles. This allowance is not applicable to fleet operations.
The IRS announces the mileage allowance rate at the beginning of the year. These rates change over time depending on the cost of gasoline and other economic data. The deduction made in the income tax return on the basis of mileage is called an IRS Mileage Allowance.
Whether you use your car for business, medical purposes or in the service of a charitable organization, it is important to track carefully your automobile expenses to maximum your tax credit. Consider the following IRS mileage allowances when preparing your tax documents. Be sure to follow the advice of a tax professional before making any decisions:
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method or after claiming a Section 179 deduction for that vehicle. In addition, you cannot use the business standard mileage rate for any vehicle for hire, such as a taxi, or for more than four vehicles used simultaneously.
Have you recently won a large amount of money due to a contest, lawsuit, or some other means? If done properly, this can ...Discover More
Taking the time to understand your 401k and strategies for building wealth will pay off in the long term. Following the ...Discover More
There are many options for tapping into your home's equity. Banks offer several kinds of home-equity financing options ...Discover More