expenses - standard mileage rates
Each year, the Internal Revenue Service issues standard mileage rates that you can use (in lieu of actual expenses) for computing tax deductions for the cost of automobile usage for business, charitable, medical and moving expenses. Employers may use the standard mileage rates as well to reimburse employees for business use of their automobiles. Standard mileage rates can be used even if the actual expenses for the vehicle usage are lower than the IRS issued mileage rates. These rates can be used for passenger automobiles, vans, pickup trucks and panel trucks. Since 2004, the standard mileage rates can be used for up to four vehicles that are owned or leased and used at the same time.
There are a few limitations on choosing the standard mileage rate
method. You must use the standard mileage rate in the first year
the vehicle is used for business. The vehicle cannot be for hire, such
as is a taxicab. Finally in the case of leased automobiles, either the
standard mileage rate or the actual expense method must be consistently
used during the entire term of the lease.
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