Deducting Vehicle Expenses: The Standard Mileage Rate
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- Опубликовано: 19 фев 2022
- The Standard Mileage rate is the easiest way for entrepreneurs and landlords to deduct their vehicle expenses. This video explains what the Standard Mileage rate covers, the various rates there are and when those rates can be used. It also tries to explain when auto mileage is deductible and when it isn't, and reviews what proof the IRS requires when it audits vehicle expenses.
2023 UPDATE:
For 2023, the Standard Mileage rates are 65.5 cents/mile for business activities, 22 cents per mile for medical purposes, and 14 cents/mile for charitable purposes.
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RESOURCES and ADDITIONAL INFORMATION:
IRS Publication 463: "Travel, Entertainment, Gift, and Car Expenses": www.irs.gov/pub/irs-pdf/p463.pdf
IRS Schedule A: "Itemized Deductions": www.irs.gov/pub/irs-pdf/f1040...
IRS Schedule C: "Sole Proprietorship Income and Expenses": www.irs.gov/pub/irs-pdf/f1040...
IRS Schedule E: "Supplemental Income and Expenses": www.irs.bov/pub/irs-pdf/f1040...
Investopedia: "How to Log Mileage for Taxes in 8 Easy Steps": www.investopoedia.com/article...
The Tax Geek on Twitter: @taxgeekusa
The Tax Geek on Reddit: www.reddit.com/r/askataxgeek
Image sources:
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Other images via Wikimedia Commons (CC 2.0 - 4.0):
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Intro Music: "Bluesy Vibes" - Doug Maxwell - RUclips Audio Library
Background and Outro Music: "A Walk in the Park" - Track Tribe via RUclips Audio Library
DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or investment advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or investment professional.
The information in this video is current as of date of publication, and is subject to changes
![14 Biggest Tax Write Offs for Small Businesses! [What the Top 1% Write-Off]](http://i.ytimg.com/vi/5YggWhLeckM/mqdefault.jpg)
![14 Biggest Tax Write Offs for Small Businesses! [What the Top 1% Write-Off]](/img/tr.png)
2023 UPDATE:
For 2023, the Standard Mileage rates are 65.5 cents/mile for business activities, 22 cents per mile for medical purposes, and 14 cents/mile for charitable purposes.
As always, thanks for you great videos.
Your kind comments are always welcome!
this was very helpful. I should have left a comment before
I'm glad you found helpful. Thanks!
Kinda insane that if I drive far for rover im not able to deduct my mileage cause its considered a commute??? Makes taking pet sitting jobs further away pretty worthless
So ive been keeping track of my miles for pretty much nothing... cool
Question. Uber eats allows this, what if I am delivering as a delagate under someone elses account/ I am volunteering my time for my mom on social security. They do the taxes but the miles were on my car, they don't have a car. Or what if I put them as a co owner of the car? Can they claim my miles? Very good video, thank you👍
Technically, to claim any sort of vehicle expense (whether SMR or actual expenses), you need to own or lease the vehicle. That being said, since this is "all in the family," and Uber is going to have records of (most) of the miles driven, I think they would be safe in claiming those miles.
I’m a freelance videographer that travels from my home to different cities to different shoots. But I get reimbursed for gas by client. It’s usually within the irs standard mileage deduction rate, a few dollars less or more. But no accountable Plan was made for my reimbursements. When I have to report my Total gross sales for my business. Do I included my gas reimbursement as well. Or just the gross sales from providing my videography service?
I would include the reimbursements as income and deduct the associated expenses.
What about a construction worker? What miles are deductible? Some have a temp job site for a few months or sometimes over a year so are the miles from home to that temp job site deductible? For me that sounds like a no cause it’s from home to work which is commuting and is not ded?
If you're paid on a W2, your miles are never deductible. If you're paid as in independent contractor (i.e. on a 1099-NEC), they still wouldn't be deductible since they would be considered to be your "commute."
Thank you for the video! What about borrowing your husband's company (the company he works for) vehicle and using it for my small business? example: to get drywall for remodeling the retail space for my business.
To be able to deduct vehicle expenses, whether actual expenses or the Standard Mileage Rate, you have to own or lease the vehicle. If you reimbursed your husband (or his company) for using the vehicle, that expense would be deductible by your business.
@@TheTaxGeek Thank you!
Hi, can I do the standard mileage rate and the straight-line depreciation?
No. You can either take the Standard Mileage Rate, or claim actual expenses including depreciation, but not both.
Thanks so much for the video! This was very helpful, however I had the following question:
If I rent out my car, and someone drives it for 1,000 miles, can I deduct that mileage? Would it be at the 63 1/2 cents per mile as well?
If it's a one time rental, you report the income on Schedule 1, page 1 (Personal Property Rental). If it's a regular business where you're filing a Schedule C you should be claiming actual expenses apportioned by business/personal use.
If you’re a full time student? Can you use those trips to submit for a deduction purposes!
nice content. i have 2 questions
1. do i need to track miles if I use the vehicle only for business purposes? e.g renting on turo under an LLC.( maybe better to take milage on first and last day of the year.
2. can I use standard mileage deduction if I have 5 or more vehicles under my LLC?
If these vehicles are being used exclusively for business purposes, you should not be taking standard mileage rate, and claiming actual expenses, and claiming actual expenses is required if you have a fleet of 5 or more vehicles. That being said, I would note the annual mileage of each vehicle for simple record keeping to assist in schedule maintenance and potential replacement. But it's not required for tax purposes.
@@TheTaxGeek is the 5 car limit on an LLC or individual? Say you have 2 LLCs with 4 cars each. Can you do standard milage deduction?
According to Publication 463 Standard Mileage rate is only available to Sole Proprietorships, and the limit is 5 vehicles per individual across all businesses they may own. Only if your LLCs are single-member LLCs that have not elected to be treated as corporations (S or C) for tax purposes may use the Standard Mileage Rate. Partnerships and Corporations must use Actual Expenses for vehicles they own.
@@TheTaxGeek very helpful. Thanks. If I have 4 cars and my wife has 3 cars all for business purposes and we file Jointly, can we use standard milage?
@@TheTaxGeek |
Dumb question: I work at a Target and am I able to track my mileage for reimbursement?
I like how succinct this is! However, I do have a question about my circumstance:
I work from home. I go to a customer to pick up parts, come back home to process them, and then drive them back to the customer when I'm done a few days later. Can I deduct this mileage?
Yes.
@@TheTaxGeek Thank you so much for the fast response!
Hi, you prob may not see this but I’d still like to ask. I’m a 1099 contractor. I work with a school about an hour away from my home and go in maybe 2-3 times a month for rehearsal and then I travel to competition sites.
If I’m hearing right, my trips to the school cannot be deducted, but my miles to the competitions can be. Is that right?
You are correct.
If I am remote or hybrid and my primary work location is from a qualifying home office, and I occasionally drive out to the company's corporate office - is that mileage deductible?
If you are paid on a W-2 as a regular employee, unreimbursed expenses are no longer deductible. If you work as an independent contractor and are paid on a 1099NEC, they are deductible.
I haven't kept a mileage log for 2022 but I know exactly how much did I drove and the exact days, can't I create a log backward now?
You can, but I can't guarantee the IRS will accept it at audit. IRS auditors are experts at spotting mileage logs that have been retroactively created.
I don't keep track of actual vehicle expenses because I use the standard mileage deductible. Can I figure out total expenses from the total standard mileage deductible? I need to give my total business (vehicle) expenses to determine healthcare tax credits.
You just need to multiply the business miles you've driven by 58 cents/mile for the miles you drove before July1 and 63.5 cents/mile for the miles you've driven since then. Bump that figure up by about 8%, and you should be pretty close for that expense.
@@TheTaxGeek I've been racking my brain over this, thank you! So for example if I drove 1000 miles before 7/1 I would say (1000 * 0.58 = 580) then (580 * 0.08 = x) then (580 + x = y) and that's the expense roughly?
I have to drive my vehicle all day at work, about 80 miles per day 5 days per week . My employer doesn't compensate me for mileage or fuel. How do I write that off on my taxes?
You can't if you're an employee and paid on a W-2. If you were paid as an independent contractor, yes.
I drive 130 miles round trip daily for work. Would this be deductible on my taxes? If so how would I go about doing this and if not why wouldn’t this be deductible?
The answer would be no. If you are paid on a w2 (i.e. an employee) you can never deduct any associated expenses. If you were paid as an independent contractor (i.e. on a 1099 NEC) you still can't deduct the mileage because it would be considered your commute. Sorry.
@@TheTaxGeek I work as a freelance photographer that travels a lot for shoots in different cities. I’m able to claim the standard mileage deduction correct? In my case, what would count as a commute if I mainly work from home and travel to shoots when a shoot arises?
So what if I’m regularly commuting 4 hours a day, possibly 200 miles a day.
1000 miles a week.
And job sites are out of cell service. What then?
What do you recommend?
You might have to track your mileage the old fashioned way....with a logbook.
@@TheTaxGeek thank you
I didn’t know that was an option
Hello can I email you about a question for my tax homework? I already have the answer but I cannot figure out how to do it
ok
@@TheTaxGeek hi I emailed you in the email you provided in your about section
If I use my vehicle 100% for turo rentals do I need to keep a log of the milage?
If a vehicle is being entirely used for a business use, it is not strictly necessary to keep track of the mileage trip-by-trip, but you should have an idea of the total miles the vehicle was driven. In such a case you would NOT use the standard mileage rate, and instead deduct the actual expenses associated with the vehicle.
@@TheTaxGeek confusing. Why wouldn't I use standard milage deduction if it saves me more in taxes?
Depends on who pays for the fuel for the rentals...if it's you, then you could take Standard Mileage, if the renters do, Standard Mileage will overstate your deductions.
I work in Irvine but then I get sent to other properties in different cities. Is that Deductible mileage?
If you're paid regular wages on a W2, unfortunately no. If you're being paid as an independent contractor on a 1099-NEC, yes. Your employer should be reimbursing you for miles traveled outside of your usual commute, but it's certainly not required by law.
@@TheTaxGeek Very helpful. Thank you so much
What if I started my business mid year, and don't have beginning of the year odometer? This is personal car used for some business fyi
The key thing is that you have some sort of independent odometer verification that shows you drove at least as many business miles as you're claiming. form example, if you drove 530 business miles and you can produce an oil change record and an emissions test that indicate you drove, say 6000 miles, you should be okay as long as you have a log of business use of the vehicle.
@@TheTaxGeek that makes sense. Thank you for taking the time to reply
@@kennyness7507 Does the i RS send your mileage back to you in the form of refund? Or do they send nothing back for your knowledge? I submitted my knowledge last time and I didn't get a refund for my mileage. How does it work. Thanks
My Mileage
Claiming mileage potentially reduces your taxable income and self-employment tax. Ultimately that can increase your refund or reduce your balance due. But there is no direct refund for claiming mileage (or any deduction, for that matter).
I have 3 vehicles for business. how do I claim the mileage for each vehicle on schedule c?
Put the information for the most frequently used vehicle in part IV of Schedule C. Attach a statement to the return giving the same information about the other vehicles (tax software will automatically do this). Total the expenses for all the vehicles and enter it on line 9 the the schedule.
Thank You very much.@@TheTaxGeek