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2012 IRS Mileage Allowance

Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks)

For this year 2012 the tax deduction rate for business miles driven is 55.5 cents per mile the same as the second half of 2011.

The IRS wants you to keep good records and for yourself to understand how your business is faring you should already have this habit. You need them for tax prep and you have to differentiate between your business, personal, charity and moving miles.

You may take either a business vehicle tax deduction with receipts for all expenses (the depreciation method using a basis reduction amount) or mileage deduction.

If you use the Depreciation - Basis Reduction Amount method  for 2012 then you get an allowance of $0.23 per mile for a car (not a truck or Van) worth less than $28,000.00 or a truck or van worth less than $29,300.00
You then have the option of deducting using the percentage method whereby
you have to save all receipts for parking fees, gas, registration, repairs etc.
If you had a catastrophic year, repair wise, or had to park in a pay garage everyday that might warrant keeping all records and possibly using the  percentage method.

For 2012 charity miles driven are still @ $0.14 per mile, same as 2011.

For 2012 moving and medical miles driven are @ $0.23 per mile.
It had been down for 2011 although in 2009 it was $.24.

The charity, medical and moving mileage deductions are not as much of an advantage.

Depending of the cost of fuel, the business miles seem to be more favorable than depreciation unless you just bought a brand new vehicle and don't drive many miles..
I use the full deduction/ allowance but it is best to keep records for both so that a the end of the tax year you can compare figures to decide which is the better.

Keep a log book to track the odometer readings each day.

Download and print this FREE PRINTABLE MILEAGE LOG.

I was told how mileage was re-created for one day when someone forgot to log the difference between personal miles and business. They went to this website
that offers online maps and driving directions and mapped out the trip.
 
Someone I know was audited by Commonwealth of Massachusetts recently and faced a problem because of his keeping a sloppy log book.
Apparently even your state can be tough on this. He was waiting to know if he would have to pay a $2.000.00 fine.

You can get software programs that are very helpful for tax prep and they are popular and some are quite simple to use.

You can look into e-filing and decide if you need professional help or can file taxes yourself.

   For medical and moving expense the IRS is allowing a $0.23 mileage deduction. For some it is negligible. There are people have to travel for dialysis or chemotherapy on a regular basis. It might be vital that they save the money using the deduction.

The charity deduction @ $0.14 could be an issue if you did it on a regular basis but again you have to check the numbers. The above info can be a make it or break it situation.

For those who are self-employed and just starting out in business for yourself you should think about this right away so that your records will be accurate.

The mileage deduction amounts change every year so be sure to come to visit this site before you start every new year just to know where you will stand deduction wise.

Good Luck!
lf you have the patience for more detailed tax information go to www.irs.gov


Copyright © Roger Chartier 2011

Notes: This is often referred to as the federal mileage rate., and answers questions about federal mileage reimbursement. Federal mileage allowance is the topic. Someone spelled it mileage. You ask, what is the federal irs mileage rate standard or IRS mileage rate reimbursement? Read the above. You do have to keep an irs mileage log.

 
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