When is mileage tax deductible?

When it is for the purposes detailed below, and *only* if you meet the recordkeeping requirements.

IRS is cracking down – don’t let it be on you!

Business –

  • Driving between two workplaces or running business errands, including your business purpose mileage from your home office *if* you have a qualified home office.
  • Driving outside the metropolitan area (generally over 50 miles) on a *temporary* basis.
  • Commuting is *never* deductible.  IRS defines “commuting” as the drive from your home to your first job or business stop and home from your last, including between multiple jobs on the same day.
  • Job search mileage to interviews, job fairs, networking groups, and meetings with headhunters and job counselors.
A qualified home office is your primary business location if that is where you perform substantially all of your business functions (billing, bookkeeping, correspondence), store equipment, inventory, and tools, regularly meet with clients *and* office space is not provided for you in another location.
If you are self-employed, the mileage is deductible on your business Schedule C.
If you are an employee, the mileage must be required but not reimbursed by your employer.  If reimbursed at a rate below the current business deduction of 56½¢ per mile, you may only deduct the net expense.  If you are allowed reimbursement and do not apply, the expense is not deductible either, so file those expense claims on time!  And, you can only take the deduction that exceeds 2% of your “adjusted gross income,” and only if you itemize deductions for taxes, mortgage interest, and charity, etc.  Flat auto allowances are more complicated; we need to talk.

Charitable –

  • Volunteer work for a qualified charitable organization (religious, educational, scientific, veterans, children’s organizations, hospitals, museums, animal shelters) in direct support of their “exempt purposes,” so not to drop off your Goodwill donations.
  • Chaperoning school field trips, teaching religious education classes, serving in food pantries, unpaid Board meetings, participation in charity runs or walks, etc., all qualify.  Track your volunteer work!

Medical –

Transportation for you, your spouse, and your dependents, including for doctors, dentists, vision care, hospitals, all types of therapy, and to pick up prescriptions and medical supplies.

Recordkeeping Requirements – 

IRS is cracking down on substantiation.  ESTIMATES ARE NOT ACCEPTABLE.  No mileage deduction can be allowed unless you have kept the required log, unless you travel a periodic regular route such as a delivery route or childcare school runs, in which case one instance will meet the requirement.
You must show the following information in your log:
  • Date, location, number of miles and business purpose, and
  • Record the year and make of your business vehicle(s), date placed in service, total miles January 1st to December 31st (beginning & ending mileage readings) and total commuting miles.
Attached are a mileage log (Mileage and Expense Log) and a spreadsheet (Daily Mileage Log); choose your method.  You may also use a smart phone app if you download the mileage reports for your tax records, or the expense reports you furnish your employer.  You may use your own calendar – paper or electronic – if you record the date, location, mileage, and business purpose for each trip.

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