Following simple steps can save valuable tax dollars and protect against IRS attacks when you report this misunderstood and overlooked deduction.
Tax-deductible mileage is the number of miles you drive between two points for either a business-, charitable-, medical- or moving- related purpose.
For business mileage, one of the points generally may not be your home.
It pays to be informed. This deduction is overlooked because it’s a non-cash deduction. It doesn't ‘jump out’ at you or your accountant like other deductions.
For 2011, the mileage rates are as follows: • 51 cents per mile for business miles driven • 19 cents per mile driven for medical or moving purposes • 14 cents per mile driven in service of charitable organizations
IRS audits routinely contest this deduction. The best way to protect your deduction is to journal, and use as proof, these items for each qualifying trip: • The date • The number of miles driven • The starting and destination points • The purpose of the trip and the people you will see
Additional rules apply for certain business owners and people who are moving.