Under the new IRS rules for deducting mileage, you can deduct:
- 58 cents per mile driven for business purposes
- 20 cents per mile driven for medical or moving purposes
- 14 cents per mile driven for charity purposes
For the moving deduction, you can claim the deduction only if you are a member of the Armed Forces on active duty moving under orders to a permanent change of station.
Instead of claiming the mileage deduction, you can claim the actual cost of using the vehicle – be sure to allocate for the mileage used for business, medical or moving or charity purposes. If you chose to use actual costs, you should include the following in your calculation:
- Lease payments or interest on a vehicle loan
- Fuel costs
- Oil and maintenance
- Vehicle repairs
- Parking fees
- Most other vehicle and driving related fees
Don’t use the mileage rate deduction if you are depreciating under Modified accelerated Cost Recovery System (MACRS) or claiming a Section 179 deduction, that would be double dipping!
If you use your vehicle for more than one purpose, i.e. medical and business, simply allocate the mileage rate based on the purpose.
There are several apps that track mileage using your phone’s GPS. It’s worth the small annual fee to keep accurate records. Most programs remember where you travel so you don’t need to re-enter commonly visited locations. The app generates a report that you can use in the event you are audited.