You had better keep good records and they should be kept around the time that they are driven. For starters print the free mileage log on this site.
The Internal Revenue Service is fussy about these records.
You can't just guess at it later. They like to know the where, when and why of it all.
The really good news is that most of the time for most people unless you have a tragic repair, the mileage can actually be a huge advantage.
A person has a 7 year old economy car that is paid for. It get's 25 miles per gallon. Winning!
That person will
drive one hundred miles and use 4 gallons of gas. Let's say the gas costs $3.50 per gallon (the high side for most areas).
The cost of the fuel is $14.00 per hundred miles.
The mileage deduction that can be taken here is $55.50 for a hundred mile trip.
Ok let's extrapolate - Every month the person drives 2000 business miles.
The deduction is $1,110.00 for that month alone.
Drive the same miles every month = $13,320.00 - Again Winning!
The cost of fuel for the year is $3,360.00.
You are now ahead by $9,960.00 Aha!
In 5 years you are ahead of the game by $49,800.00 You have to love that!
If you have done some driving for charity you can take a mileage deduction for charity at a different rate.
From the horses mouth www.irs.gov |
2012 Mileage Allowance