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Learn How Much You Can Deduct For Business Miles In 2008
If there is a silver lining to preparing your tax return, it is clearly the tax deduction. It is your primary weapon when it comes to reducing the amount you have to pay Uncle Sam. Some deductions are better than others, particularly those that increase yearly.
If there is a silver lining to preparing your tax return, it is clearly the tax deduction. It is your primary weapon when it comes to reducing the amount you have to pay Uncle Sam. Some deductions are better than others, particularly those that increase yearly.
Of all the deductions that go up and down each year in value, the one you can claim for mileage is the biggie. It is based on a variety of factors including gas prices projected for the year. With oil near $100 a barrel, the deduction is up.
Most people assume the mileage deduction can only be claimed for pavement crossed on a business purpose. While this is the most common deduction, there are actually two other facets you can also claim if you are eligible.
The first is mileage for medical or moving purposes. The second is for miles driven in service to a charitable organization registered with the IRS. There are tests for both deductions, so make sure you read up on them.
As the collection agency of the United States Treasury, the Internal Revenue Service sets the mileage rates for all the categories each and every year. It has kicked out figures for 2008 and there is some good news again.
For business mileage you incur in the 2008 fiscal year, you can deduct 50.5 cents per mile. If you drive 100 miles on business in a week, for example, you can claim a deduction of $50.50. Of course, you want to keep a running total for the year.
You would think the moving, medical and charitable rates would also increase. Alas, this is tax where common sense is only a rumor. For 2008, the charitable rate is the same at 14 cents and moving and medical actually drops to 19 cents a mile.
Every deduction is a good deduction and that clich certainly applies to mileage deductions. If you claim the deduction, make sure you keep records of your mileage in a mileage book. If you are audited, the IRS will want to see it.