2009, 2010 Car & Vehicle Mileage Deductions
April 19, 2010 by Hanna08
We are all familiar with the prices at the pump. That is why it is more important than ever to seek every deduction possible when calculating your driving expenses that relate to your work or business. It can be a time consuming process but tracking and deducting your driving expenses can prove to be a great deduction on your tax return.
This year you will be able to claim 50.5 cents for every mile driven for a business purpose. This is an increase from the previous 48.5 cents per mile.
You will need to have proof of your driving expenses. If you take the standard deduction you will need track miles and if you choose to deduct actual vehicle expenses then you will also need to track other items such as gas, repairs, insurance, and registration. It is very important to keep these receipts and documents organized so that you are not scrambling at the end of the year.
Here are some tips to maximize your car mileage deduction:
- Learn what is allowable as a business mileage expense – The IRS offers publication 463 that gives you many examples to look over.
- Stay organized with receipts and tracking mileage – If you are audited this information is necessary and can save your deductions.
- Fill up when gas prices are lower – Since the deduction rate doesn’t change, this will help you maximize your deduction.
- Seek Assistance – This can be a lengthy process, we suggest using online tax preparation software such as TurboTax online.
Please visit TurboTax Online with all of your IRS mileage deduction questions. TurboTax online offers free tax calculators and deduction maximizers to help you get the most deductions possible.
Deductions reduce your taxable income. Every single taxpayer gets a standard deduction of $5,150 that reduces your taxable income by that amount. It does NOT mean that you get that much back! If your itemized deductions are only $28.00, it would not make sense to itemize as you would pay MUCH higher taxes if you did.
If you made less than $8,450 in 2006, you have no tax liability at all. You only need to file a return if you had income taxes withheld from your pay and want to have those taxes refunded.
If no income taxes were withheld form your pay (box 2 on your Form W2) there is no need to file a return unless you qualify for the Earned Income Tax Credit. If you're under 25 and have no dependents, you are not eligible for the EITC.
doesnt the investment gain (interest, dividends, cap gain) have an associated tax liability up to the same 25% and therefore negating some or any of the tax benefit derived from the mortgage interest deducted? also, don't forget to mention the fact that many people only qualify to itemize deductions because of their substantial mortgage interest deduction and absent that (having a home free-and-clear for example) they would still qualify for a decent standard deduction (almost $11k MFJ this year).
IRS is increasing size of the standard deduction, estate tax exclusion, and personal exemptions in 2012: