1. What is Mileage Tax Deduction?

Mileage tax deduction allows taxpayers to deduct business-related vehicle expenses based on miles driven. The IRS sets standard mileage rates each year that can be used to calculate this deduction.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Mileage \) — Total business miles driven
• \( IRS\ Rate \) — Current IRS standard mileage rate ($/mile)

Explanation: Multiply your total business miles by the current IRS standard mileage rate to calculate your tax deduction.

3. Importance of Mileage Tax Deduction

Details: Proper mileage tracking and deduction calculation can significantly reduce taxable income for self-employed individuals, business owners, and employees who use personal vehicles for business purposes.

4. Using the Calculator

Tips: Enter total business miles driven and the current IRS standard mileage rate. Ensure you use the correct IRS rate for the tax year and purpose (business, medical, moving, or charitable).

5. Frequently Asked Questions (FAQ)

Q1: What is the current IRS standard mileage rate?
A: IRS mileage rates change annually. Check the IRS website for the most current rates for business, medical, moving, and charitable purposes.

Q2: Can I use this for all vehicle expenses?
A: The standard mileage rate includes all vehicle operating costs. Alternatively, you can deduct actual expenses (gas, maintenance, insurance, depreciation) but cannot use both methods.

Q3: What records should I keep?
A: Maintain a mileage log with dates, destinations, purposes, and odometer readings for all business trips. Digital tracking apps can simplify this process.

Q4: Are commuting miles deductible?
A: Regular commuting from home to work is generally not deductible. Only business miles beyond normal commuting are eligible for deduction.

Q5: Can employees deduct business mileage?
A: Under current tax law, employees cannot deduct unreimbursed business expenses, including mileage, on their personal tax returns.