Fuel break for the self-employed… and others!
If you’re self-employed (i.e. you fill out a Schedule C at tax time), the IRS has good news for you: IRS Increases Mileage Rate Until Dec. 31, 2005
The business miles deduction rate was recently raised from 40.5 cents a mile to 48.5 cents a mile. The IRS says “This is about fairness for taxpayers,” since gas prices are truly costing businesses more money.
The increase is only for the months of September through December (it won’t retroactively cover the first eight months of the year) but it’s still a relief to those who claim business miles.
This may benefit you even if you’re not self-employed; for one, if you drive for your employer and are reimbursed for mileage, you can reasonably expect that rate to track the IRS’s increase. If this is you, delawareonline’s article, “Cashing in on IRS mileage rate hike” might help you out.
Another way this could benefit you is if you claim for medical miles or moving miles. That rate has gone up from 15 cents/mile to 22 cents/mile. Of course, you’ll still have to evaluate whether it will be worth more than the standard deduction to you (when combined with any other deductions you’re eligible to claim), but it’s definitely worth looking into.
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What can you tell me about moving miles? Since I’ll be moving. A lot of miles.
Hey, dude. Check out IRS Publication 521 (the link is to the page where most of the information is). It’s got a ton of info on moving expenses and taxes.