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April 21, 2021 | Posted in:

Tips to Maximize Your Mileage Deduction

Each year standard mileage rates for business travel, medical driving, moving mileage and mileage rates for charitable driving are set by the IRS.

Current Mileage Rates

Mileage Type 2020 2021
Business miles 57.5¢ per mile 56¢ per mile
Medical and moving miles* 17¢ per mile 16¢ per mile
Charitable miles 14¢ per mile 14¢ per mile

* Miles deducted as a moving expense are limited to a permanent change of station for military purposes only.

Too often this deduction is overlooked because proper documentation was not followed. Here are a few tips to ensure you receive the full benefit of this tax deduction.

Tip 1: Track your applicable mileage in an auto log.

This log is required to ensure your deduction is not disallowed during the course of an audit. Please make sure the business/charitable/medical purpose, date and distance is clearly noted. Our Alloy Silverstein CPAs recommend MileIQ.

Tip 2: Also keep track of parking, tolls and other miscellaneous travel expenses.

These can often be deducted in addition to the standard mileage rate.

Tip 3: Submit expense reports if your mileage can be reimbursed.

Most employers will reimburse you for business mileage at the approved rate, but many employees fail to ask for reimbursement. Remember, your employer can deduct this reimbursed expense on their tax return as well.

Tip 4: Keep track of medical miles.

Even though you need to surpass a percent of your income prior to taking medical expenses as an itemized deduction, still keep track of qualified medical miles. It often only takes one major medical bill to make all your other excess medical expenses deductible.

Tip 5: Plan your business trips to ensure your miles are deductible.

Commuting miles to and from work are not deductible. However, if you stop off at a supplier first, then the mileage from the supplier to your workplace is a deductible expense.

Tip 6: Do not forget charitable miles.

This deduction is one of the most often overlooked deductions. Do you drive for Meals on Wheels or for a school function? Do you volunteer as a coach for a non-profit sporting group? These miles add up over time and are often not properly documented.

Need assistance? Turn to your Alloy Silverstein CPA this tax season and every other month of the year.

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