If your job requires you to constantly be on the road, you know how tiresome driving can be. However, one of the perks is deducting business mileage on your taxes. Because the IRS increased the mileage rates over the summer to 55.5 cents per mile, people who work in Jacksonville real estate and drive from community to community have even more of an incentive to keep an eye on their mileage.
A recent post on the Equifax Finance Blog offers some tax tips for deducting business mileage. Tax specialist Eva Rosenberg’s article, “2012 Standard Mileage Rate: How It Affects Your Business Vehicle,” has the following advice.
If you use your car for business or work, you probably already know that you can use either the standard mileage deduction or you may use actual expenses. Using actual expenses allows you to claim depreciation deductions, in addition to the registration fees, repairs, insurance and fuel costs. Aside from the standard mileage rate increase, the rate for moving and medical mileage has also increased to 23.5 cents per mile from 19 cents. Charitable mileage stays the same, at 14 cents.
One thing that people may not realize is that the standard mileage rate has deduction built into it. Rosenberg points out that when you sell your car, you must take depreciation into account. She suggests using the table on the Small Business Taxes & Management site to determine how much depreciation you used each year. This number will be be based on the total number of business miles you reported on your tax returns.
Read Rosenberg’s full article on the Equifax Finance Blog.