Everything You Need to Know About Deducting Mileage on Your Taxes

Straight Talk: Everything You Need to Know About Deducting Mileage on Your Taxes

Welcome to Straight Talk.  Straight Talk is just that. I don’t mince words. I tell it like it is.
I have reached an age where the nonsense, the B.S. and the snake oil salesman who don’t know what they are talking about just won’t do. I have over 35 years of experience in my industry, advanced degrees and countless hours coming alongside business owners to build rock-solid foundations and use the most advanced business, legal and tax ideas and strategies to save tens of thousands to hundreds and yes even millions of dollars, protect what you have and increase your lifetime net worth.
I appreciate your enjoyment of our insights on growing your business by design, changing your wealth and increasing your choices.

One of the smartest things a business owner can do is to take advantage of the mileage allowance.  If you’re self-employed, you will want to take a business deduction for the business use of your personal car.

They say nothing is free…

I think there may be one exception to this rule.  That is the mileage allowance. The IRS gives you this one, free.  In 2018, the allowance is 54.5 cents per mile when you use your car and drive for business.  

In fact, you get a choice.

You get to compare the actual cost of driving the car plus depreciation on the car against the standard mileage rate.  Whichever is better is the one you get to select.

Whatever selection you make, however, you are locked into that selection and you can’t change it.  

Here is a simple example.  

If you drive 20,000 miles for business you get to take a deduction of 10,450 dollars on your tax return.  If you are in the 30% tax bracket this will save you a little over $3,000 in taxes. Free.

By comparison, if your total out of pocket gasoline, tires, repairs, and insurance costs plus some depreciation total $8,000 during the year, then the standard mileage rate will be a better choice.

The IRS does require one item of proof should you be examined.  

You can use a mileage log, diary or some type of account book.  The mileage log is a record of where you went, when you went, how many miles you drove and the purpose for the trip.  Otherwise, there is no proof that you actually drove the number of miles claimed or the reason for the trip.

The lack of proof is why the IRS will disallow the deduction.  So keep a mileage log.

Our vision is to enhance the way people think and talk about wealth not only in money but in values, beliefs, and traditions.  Our mission is guiding people in Mastering the 5 Stages of Wealth. Survival to make ends meet; Security for themselves and their family; Affluence by enjoying the benefits of the wealth created; Influencing others through one’s own clarity of purpose and vision; and Legacy of the impact and difference you can make in the world and how you will be remembered.

Thank you for being a part of our Straight Talk community.

Our goal is to educate, transform and inspire business owners and families in enhancing the way they think and talk about wealth in money, values, beliefs, and traditions.  

What is your Legendary Future?  We welcome you to share your ideas and thoughts.