🚗 The IRS allows taxpayers to deduct miles driven for certain purposes, like business, medical, moving, and charity. To claim the deduction, you’ll need to track miles and follow some rules. Here’s a guide to using the IRS mileage rate.
For 2023, the standard IRS mileage rates are:
💰 65.5 cents per mile for business
💰 14 cents per mile for charity
💰 22 cents per mile for medical and moving
If you’re self-employed or a contractor, you can deduct car expenses for business use. Commuting to your regular workplace doesn’t count. But trips to meetings, clients, and temporary work sites do qualify.
You have two options to calculate the deduction:
- Standard mileage rate: Multiply business miles by the IRS rate. You must own or lease the car. Details can be complex, so review IRS guidance.
- Actual expenses: Track and deduct real costs like gas, repairs, insurance, fees, and depreciation.
You can’t use both standard mileage and actual expenses.
The IRS mileage rates cover all types of vehicles – whether gas, diesel, electric, or hybrid models. These standardized rates are set based on annual studies examining the costs of operating different kinds of automobiles. The business use rate accounts for both fixed and variable costs like insurance, maintenance, fuel, depreciation, etc.
Other IRS Mileage Rates
Charity: Deduct miles driven for volunteer work or charitable organizations. Parking and tolls too. Or deduct gas/oil instead of miles.
Moving: Only active military can deduct miles for moves related to a permanent change of station.
Medical: Deduct miles for visits to doctors, transporting others for care, and more. Plus parking and tolls. Or deduct gas/oil instead.
Claiming Mileage Deductions
To write off miles for medical or charitable purposes, you’ll need to itemize deductions on Form 1040 Schedule A when you file taxes. This involves more time and paperwork than taking the standard deduction.
If you’re self-employed, claim business-related mileage as a deductible expense on Schedule C. Tax preparation software and mobile apps can make it easy to track miles and calculate the deduction amount.
Always retain mileage logs and receipts. The IRS may request proof if you’re audited, so stay organized. Mileage tracking apps can automatically log each trip, simplifying record keeping. Or use a notebook kept in your car to manually log mileage. Having detailed records will help verify your claimed deduction.
Rates in the first half of 2022 were:
💲 58.5 cents for business
💲 18 cents for medical/moving
💲 14 cents for charity
From July to December, the business rate increased to 62.5 cents per mile due to high gas prices.
🔢 Tracking your mileage is crucial if you plan to claim these deductions. Stay organized to save on taxes! For 2022, the rates were different, so be sure to use the right ones for your tax year.
