Here is the surprising thing: Most people do not realize just how large a deduction they may be overlooking by not keeping track of their deductible mileage. Even though there are different rates for each of the three deductible mileage deductions, the mileage for each one can quickly add up.
If you have never kept track of your mileage, perhaps 2016 can be the year you start keeping track of your mileage. Here are some pointers that you need to consider for each type of deductible mileage.
Business mileage is the most popular mileage deduction that people take because this deduction has the highest mileage rate (currently $0.54 per mile for 2016). A number of factors must be considered when calculating/tracking your business mileage.
- Business mileage does not include commuting to and from your home to your job. In other words, you cannot deduct mileage when you go to work or come home from work.
- If you drive your vehicle for business purposes after you arrive at work, this mileage IS deductible.
- If you have more than one job (two or more separate employers), and you go from one employer to a second employer, this mileage IS deductible (between jobs only).
- If you own rental property, you might be able to deduct some mileage that is related to the rental property when certain conditions are met.
Medical mileage is often overlooked. Medical mileage does not include trips to the Veterinarian's office (i.e., taking your pet(s) to the vet). Trips to the doctor's office, hospital, medical clinic, and the pharmacy are all considered medical mileage. Many people don't think of the trip to the pharmacy (to pick up prescriptions) to be medical mileage.
Medical mileage is one of the most overlooked deductions because most people think that medical mileage is not that high. Medical mileage is often much higher than most people think. Consider keeping track of this mileage and you will discover that medical mileage can be a much larger deduction than you think.
Medical mileage is $0.19 per mile for 2016 .
If you moved (or are planning to move) during the year (especially if the move was more than 50 miles from your previous employment), this mileage can be deductible. Certain other expenses (such as hotels and travel expenses such as air fare) may also be deductible. The mileage rate for moving is the same is for medical, $0.19 per mile. Keep track of all mileage related to your move (this includes mileage for looking for a new home, travel expenses, etc.).
Even though charitable mileage is the lowest of the mileage rates ($0.14 per mile for 2016), it should not be overlooked. If you drive your vehicle for charitable purposes, the mileage is deductible.
You might be asking, "When do I drive my vehicle for charitable purposes?" The answer is quite simple. If you drive your vehicle to take care of charitable business (i.e., to transport people, equipment, supplies, etc.) from the charitable organization to a charitable event, this mileage is deductible. If you drive to the store (to purchase items for a charitable organization), this mileage is deductible. However, simply driving to/from the charitable organization is NOT deductible.