If your job involves driving, the Internal Revenue Service has good tax deduction news for you next year.
The per-mile rate you can deduct for business mileage is going up a cent and a half in 2015. For 2014 work-related driving and the returns you’ll file by next April 15, the rate is 56 cents per mile. On Jan. 1, 2015, that rate goes to 57.5 cents per mile.
The business mileage rate is just one vehicular adjustment made in connection with current inflation. The IRS also has announced changes in 2015 to the standard mileage deduction rate that can be claimed for moving and medical travel.
2014 and 2015 per-mile mileage-rate tax deductions
|2014||56 cents||23.5 cents||23.5 cents||14 cents|
|2015||57.5 cents||23 cents||23 cents||14 cents|
Rates up, down, same
Yes, you read that table correctly. The business per mile rate next year goes up while the moving and medical driving deductions each drop by a half penny.
The reason is because IRS analysts consider primarily the cost of oil and gas when making inflation changes for moving and medical travel purposes. As any driver can tell you, those prices have been falling.
For business travel, however, the IRS inflation adjustment also takes into account all the costs associated with owning and keeping a vehicle running. This includes auto insurance and repairs in addition to fuel.
And the charitable driving deduction rate? It’s still 14 cents. But don’t blame the IRS for short-changing the miles you travel to help out your favorite charity. That rate is set by Congress and by law cannot be adjusted for inflation.
Keep good records
One other thing also remains the same. Regardless of why you’re making a tax-related trip, keep good records.
You always can use computer map programs to recreate your trip specifics when you file your return. It’s much easier, however, to simply jot down where you went, the distance to and from there, why, and if was for business, the people you talked with and the topics.
I’m still old school, so I keep a pencil and small notebook in my car to record tax-related travel specifics. But if you have a smartphone, there are numerous travel apps that will do the calculations for you.
And if you’re really into details, you also have the option of tracking all your vehicle’s actual costs and claiming those instead of simply using the standard mileage rates. It’s more work, but if it provides a larger deduction, then the effort’s worth it.
Regardless of which auto deduction method you use, be diligent in record keeping. You’ll be glad you have all the correct data when you file your taxes.
And you’ll be really glad you have the information if an IRS auditor asks how you mapped out your mileage deductions.
More tax info from Bankrate
Want the latest news on taxes, money-saving tax tips, tax scams and myriad other tax matters? Subscribe to Bankrate’s free Weekly Tax Tip newsletter.
You also can follow me on Twitter: @taxtweet.
Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”