The Internal Revenue Service issued optional standard mileage rates used to calculate the deductible costs of operating automobiles, vans and trucks for business, charitable, medical or moving purposes. The 2014 rates for business, medical and moving are down 0.5 cent per mile.
A taxpayer may not use the standard mileage rate for a vehicle after using the Modified Accelerated Cost Recovery System (MACRS) depreciation method or after claiming Section 179 deduction on that vehicle. In addition, the business standard mileage rate may not be used for any vehicle used for hire or for more than four vehicles used simultaneously.
Taxpayers always have the option of calculating the actual costs of using their vehicles rather than using the standard mileage rate. Actual costs would include gasoline, oil, repairs, insurance, maintenance and depreciation of the purchase cost. Use of the standard mileage rate in the first year of business use is considered an election to exclude the vehicle from MACRS depreciation.
We recommend that you keep a daily log of the travel and expenses for each of your automobiles to document such income tax deductions. The IRS tax forms ask if you have written records of your mileage and if you’re ever audited you can be sure the IRS examiners will ask the same. If you would like more details and advise, please call us 610.770.9236 or send us a message email@example.com.