Good news if you use your car for business, medical or moving purposes: The IRS is raising the tax-deductible mileage rate to offset high gas costs.
Starting July 1, when you use your car for business, you'll be able to write off 55.5 cents (the standard mileage rate) for each mile you drive through December 31, 2011. This is a 4.5-cent increase from the amount you could deduct the first half of the year. For more information about using the standard mileage rate when deducting expenses for the business use of your car, see Tax Topic 510.
The standard mileage rate for calculating deductible moving or medical expenses also will increase by 4.5 cents to 23.5 cents a mile. If you use your car to move and the move is connected with taking a new job at least 50 miles farther from your old home than your old job was, you can write off 23.5 cents for each mile you drive. You don't have to itemize on your tax return to claim this deduction. For more information, see Tax Topic 455, Moving Expenses.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You can use the standard mileage rate when tallying transportation costs when you drive your car to the locations where you receive medical care. However, you must itemize to deduct medical expenses, and you get a tax break only to the extent your total unreimbursed medical costs exceed 7.5% of your adjusted income. See our Taxopedia for more information about deducting medical expenses.
The standard mileage rate for using your car to provide services for charitable organizations -- 14 cents a mile -- will not increase. This rate is set by statute, not the IRS.
To maximize your deductions year round, subscribe to the Kiplinger Tax Letter.
-
Six Missteps to Avoid as You Transition to RetirementDon't lose sight of your finances when you finally reach retirement. These six classic missteps can chip away at the nest egg you’ve worked so hard to build.
-
Why Does One Claim Jack Up My Insurance After Years of No Claims?Even loyal customers can be hit with an insurance premium hike after a claim, despite going many years without any claims. There's a reason for that.
-
NYC Congestion Pricing: Ghost Tax or Necessary Fee?State Taxes Drivers headed to Manhattan’s downtown district will face a new $9 toll in January.
-
Tax Credit vs. Tax Deduction: What’s the Difference?Tax Breaks Your guide to tax deductions and credits, how the IRS treats them differently, and how they impact your tax bill.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
IRS: Here’s How to Recover Your Tax Records After a Natural DisasterTax Records Your tax documents can help you get federal relief faster, the IRS says.
-
Voters Approve New Veteran Property Tax ReliefTax Relief Thanks to the election, some Veterans will soon see expanded property tax exemptions.
-
Nevada Approves Diaper Tax Relief Amid Childcare CrisisTax Relief Nevada voters have expanded sales tax relief to diapers. But are prices still too high?
-
Earned Income Tax Credit (EITC) 2024: How Much Will You Get?Tax Credits The refundable amount for workers with or without children is slightly higher this year. Here’s what you need to know.
-
Five Cities With the Lowest Property Tax in the U.S.Property Tax Property taxes are ultra-low in these popular metro areas, but is housing affordable?
