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What is the 2014 Mileage Rate for Business Taxes?

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Question: What is the 2014 Mileage Rate for Business Taxes?

If you are working on your 2014 business taxes, you need to know the IRS standard mileage rate in order to calculate your mileage expense deduction.

Answer:

The 2014 IRS Standard Mileage Rate for business tax purposes depends on when in the year the business travel took place.

2014 IRS Standard Mileage Rate, effective January 1, 2014

  • 56 cents per mile for business miles
  • 23.5 cents per mile for medical or moving purposes
  • 14 cents per mile in service of charitable organizations.
The business mileage rate and medical/moving rate decreased .5 cents; the charitable driving rate stays the same as 2013.

 

How to Calculate Business Mileage for Tax Deductions

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.

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.

Restrictions on Using Standard Mileage Rates:
The IRS says that you may not use the standard mileage rate if you are using MACRS accelerated depreciation or if you are claiming a Section 179 deduction for the vehicle. Your specific circumstances may vary, so check with your tax advisor before you take the deduction.

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?

 

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