The 2012 IRS Standard Mileage Rate for business tax purposes depends on when in the year the business travel took place.
2012 IRS Standard Mileage Rate:
- 55.5 cents per mile for business miles
- 23 cents per mile for medical or moving purposes
- 14 cents per mile in service of charitable organizations.
How to Calculate Business Mileage for Tax Deductions
To calculate the tax deduction for use of a vehicle for business purposes, you must first decide whether to use the standard mileage rate or actual expenses. There are several variables involved with this decision, but the most important is whether you use the vehicle more or less than 50% for business purposes.
If You Drive Less Than 50% for Business, you can use the standard deduction to keep things simple and easy. Keep track of all your miles driven and multiply by the current IRS standard mileage rate for the year.
If You Drive More Than 50% for Business. you may be able to increase your deduction by using actual expenses. You will need to keep track of all expenses with supporting documentation.
Your specific circumstances may vary, so check with your tax professional before you take the deduction.
The actual calculation of tax-deductible business driving expenses, using the standard mileage rate, is to multiply the number of miles driven for business use by the standard rate in effect at the time. Personal miles are never tax-deductible, so these should not be included in the calculation.
Read more about business mileage calculations.
CPA Gail Rosen answers some common questions about mileage deductions for business taxes, including:
- What qualifies as "commuting miles?
- Can I deduct mileage if I have advertising on my car?
- How do I calculate mileage from my home based business? and
- Can I deduct mileage for a non-company car?
