1. What is Mileage Tax Deduction?

The mileage tax deduction allows taxpayers to deduct certain vehicle expenses when the vehicle is used for business, charity, medical, or moving purposes. The IRS sets standard mileage rates each year that are used to calculate deductible costs.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Miles Driven — The number of miles traveled for deductible purposes
• IRS Mileage Rate — The standard rate set by the IRS (changes annually)

Explanation: This calculation provides the total deductible amount for tax purposes based on your documented miles and the current IRS rate.

3. Importance of Mileage Tracking

Details: Accurate mileage records are essential for maximizing tax deductions while complying with IRS requirements. Proper documentation must include dates, destinations, purposes, and odometer readings.

4. Using the Calculator

Tips: Enter total miles driven for deductible purposes and the current IRS mileage rate (default is 2023 business rate of $0.655/mile). The calculator will compute your potential tax deduction.

5. Frequently Asked Questions (FAQ)

Q1: What are the 2023 IRS mileage rates?
A: Business: $0.655/mile; Medical/Moving: $0.22/mile; Charity: $0.14/mile (set by Congress).

Q2: Can I use this for prior years?
A: Yes, but you must use the IRS rate for the specific tax year in question.

Q3: What records do I need to keep?
A: Maintain a mileage log with dates, purposes, destinations, and miles driven for each trip.

Q4: Can I deduct commuting miles?
A: Generally no - commuting between home and regular work location is not deductible.

Q5: Should I use standard mileage or actual expenses?
A: Compare both methods - standard mileage is simpler but actual expenses may yield higher deductions for some vehicles.