Here’s some good news from the IRS. The current IRS mileage rate for business miles has increased from 55 cents per mile to 56.5 cents per mile. The IRS sets the mileage rate on January 1st of each year and usually the rate remains in effect for the entire year.
You can claim a tax deduction for mileage using the standard rate or you can take the actual costs of operating a vehicle.
The rate for business miles driven during 2013 increases 1 cent from the 2012 rate. The medical and moving rate is also up 1 cent per mile from the 2012 rate.
The IRS Standard Mileage Rates for 2013;
- 56.5 cents per business mile driven
- 24 cents per medical or moving mile driven
- 14 cents per charitable mile driven for the use of a car, van, pickup truck, or panel truck
You may also include the costs of parking and tolls while using your vehicle for the purposes listed above. The mileage does not count when driving from home to work, or from work to home. The mileage does count from the point of arriving at your work place, and driving to extended training, or to meet with a client, etc.
Keep a notebook in your glove compartment
This is also a good time to remind ourselves that when it comes to audit-proofing your tax return, keeping a detailed mileage log is the best way to avoid a problem should the IRS request documentation for your mileage deduction. So be sure to keep a notebook in your glove compartment and track your business trips by recording the date, business purpose and mileage amount for each business use of your vehicle. Maintaining this habit will come in quite handy at both tax time and audit time!
Take note employers: If you have employees and are reimbursing their miles via the IRS mileage rate, be sure to begin using the new rate as of July 1. This increases your deduction and you will make your employees happy by increasing this tax-free reimbursement of business use of their personal vehicle. Do yourself (and your hard-working employees) a favor and stay in sync with the IRS rate.
Visit TurboTax Online to claim your mileage rate tax deduction.