'But under the new tax reform law, workers employed by a company will no longer be able to claim the mileage they run up by using their car on the job.' If you drive 2,000 miles for business purposes in 2016, using the standard mileage rate, you'd claim $1,080 as a deduction on your taxable income.The IRS' higher mileage deduction 'is a pretty good amount and it helps the one-in-five Americans who are now self-employed,' she said. The IRS establishes a standard mileage rate each year. For 2016, the rate is 54 cents per mile. If you use the standard mileage rate, you take a preset deduction for every mile you drive for business purposes. Additionally, the IRS requires you to keep your mileage log for three years from the date on which you file the income tax return containing your deduction.Ĭalculating your deductions You have two options for claiming your business mileage deduction: You can use the standard mileage rate as determined by the IRS, or you can deduct your actual expenses. The key is to update your records regularly to ensure that they're precise. You can keep a mileage log in a notebook and update it by hand, or use a spreadsheet to continuously track your mileage. Each time you use your vehicle for business purposes, you must record the following information: Your mileage log must include the starting mileage on your vehicle's odometer at the beginning of the year and its ending mileage at the conclusion of the year. For this reason, you'll need to keep a thorough, accurate mileage log each year you attempt to claim a deduction. Keeping a mileage log The IRS tends to be strict in its documentation requirements for business mileage deductions. You can also deduct your mileage if you travel to visit customers or use your vehicle to run business-related errands, such as obtaining supplies or getting documents notarized. You can also take a mileage deduction for travel to and from business conferences, off-site meetings, and business-related events, including lunches or dinners with current or prospective customers. On the other hand, if you need to travel to a second company location that is not your primary office, you may be able to deduct your mileage costs. Your daily commute from your home to your permanent work location does not qualify for a business mileage deduction. Qualifying mileage deductions The IRS has specific rules in place as to what types of business driving are eligible for a mileage deduction. To do so, you'll need to keep an accurate record of your business-related driving and activities. If you use your own vehicle for business purposes, you may be able to deduct a percentage of your driving-related expenses from your taxable income. This article was originally published on Oct.

Mileage calculator for taxes 2019