1. What is Mileage Tax Deduction?

The mileage tax deduction allows taxpayers to deduct qualified business miles driven during the year. The IRS sets a standard mileage rate each year that represents the deductible costs of operating a vehicle for business purposes.

2. How Does the Calculator Work?

The calculator uses the standard mileage deduction formula:

Where:

• Business Miles — Total miles driven for business purposes
• IRS Rate — Current standard mileage rate set by the IRS (for 2023: $0.655 per mile)

Explanation: Each business mile you drive can be multiplied by the IRS rate to calculate your total deductible amount.

3. Importance of Mileage Tracking

Details: Accurate mileage tracking is essential for maximizing tax deductions while maintaining compliance with IRS requirements. You must maintain a detailed log of business miles driven.

4. Using the Calculator

Tips: Enter your total business miles for the year and the current IRS mileage rate. The calculator will compute your total deductible amount.

5. Frequently Asked Questions (FAQ)

Q1: What qualifies as business miles?
A: Miles driven for work purposes (meetings, client visits, business errands) but not regular commuting to your primary workplace.

Q2: How often does the IRS rate change?
A: Typically annually, often mid-year. Check IRS announcements for current rates.

Q3: Can I use actual expenses instead?
A: Yes, but you must choose one method (standard mileage or actual expenses) for each vehicle and maintain consistent records.

Q4: What records should I keep?
A: Maintain a log with dates, destinations, purposes, and odometer readings for all business trips.

Q5: Does this apply to rideshare drivers?
A: Yes, rideshare drivers can use either the standard mileage rate or actual expenses for their business miles.