One of the most overlooked deductions for taxpayers is the mileage they put on their vehicles. Taxpayers often assume they must have a business to claim mileage deductions. Business owners get the most benefit of the IRS mileage deduction rules, many individuals who don’t own businesses can get a tax write-off for driving their cars. Read on to learn how if driving means you can boost your tax refund.
How much can this mileage really save you? Each year the IRS sets the mileage rates. It recently announced the new rates, which went into effect January 1, 2014. These rates are a half cent decrease from the 2013 rates.
- 56 cents per mile driven for business purposes
- 23.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
Don’t have a business? No problem. Here’s a breakdown of the common, non-business ways you can save money on your taxes with a mileage deduction. Just be sure to track your mileage in writing so you can prove it if ever asked for the details.
Medical mileage can include driving to and from routine doctor appointments, trips to pick up prescriptions, taking your kids to the pediatrician and trips to the emergency room. If you consider all the separate medical trips you make it can add up fast. Many taxpayers don’t qualify to take this deduction because of some stiff IRS restrictions on medical write-offs but it’s a great idea to track your medical mileage. You won’t really know if you’d qualify for this until the end of the year since many medical appointments and issues are unplanned.
Unfortunately, the IRS doesn’t include the family pet in on this deal. Sorry, trips made for Fido’s vet appointments don’t count!
There are some specific IRS rules around this deduction but if you did more than a local move and you got a new job in the process,you’re probably eligible. This is a very common deduction – no need to worry about this raising serious red flags for the IRS.
Pro tip: if you have more than one vehicle, track the mileage on all your vehicles.
The IRS rewards your generosity with a deduction on your tax return. But many taxpayers don’t realize that the mileage connected to their charitable work can count as well.
When you drive to Goodwill to drop off some old clothes, go downtown to serve at the soup kitchen, or serve in a number of ministry or humanity efforts, your mileage as a volunteer is worth something. Again, there are limitations – namely, only taxpayers who itemize their deductions (instead of taking the standard deduction) are eligible to claim this mileage. But it could certainly add up, even for an everyday philanthropist.