The price of gas has gone down in 2014, and so has the Standard Mileage Rate!
Tax Season 2015 is here. Before filing your 2014 taxes, you’ll want to organize any receipts related to the costs of your vehicle if used for business, medical, charity or moving reasons.
It pays to stay organized; the more expenses you end up reporting, the larger your refund check will be.
Standard Mileage Rate 2014
Small business owners, employees, self employed individuals and other taxpayers, can use the standard mileage rate to calculate their tax deductible vehicle costs. These costs must be related to business, charity, medical or moving purposes.
According to the IRS, the standard mileage rate for the use of a cars, vans, pickups, and panel trucks are as follows;
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56 cents per mile for business miles driven
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23.5 cents per mile driven for medical or moving purposes
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14 cents per mile driven in service of charitable organizations
The 2014 mileage rates for business, medical and moving expenses have decreased one-half cent per mile from the 2013 standard mileage rates.
However, the standard mileage rate for charitable expenses hasn’t changed since the Clinton era. In fact, this rate is fixed and can only be changed by Congress.
Keep in mind, there are a few rules of who can and cannot use the standard business mileage rates;
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the standard mileage can be used for a maximum of four vehicles
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you cannot use the standard mileage rate if you’ve already claimed a Section 179 deduction for that vehicle
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you cannot use the standard business mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS)
Standard Mileage Rate VS. Actual Costs Method
The Standard Mileage Rate is designated and set by the IRS. If you’d rather keep track of and claim your actual expenses of operating your vehicle, you can.
Keeping track of your actual expenses can be a nightmare, especially if you’re unorganized. You’ll have to save every single receipt and keep track of just about everything related to your vehicle, including all documents supporting the following expenses;
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gas
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repairs
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insurance
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lease payments
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depreciation
Unsure of what method to use? If you have an expensive vehicle with high upkeep costs, using the actual cost method will probably be worth the extra effort of keeping track of and reporting actual costs.
How to Report Vehicle Costs on Your Taxes:
Whether you choose to deduct your vehicle expenses using the standard mileage rate or actual cost method, you’ll still want to keep organized records of the details of your mileage including the following;
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dates
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mileage
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if applicable, business destination and purpose
Rather than doing all of the complicated IRS calculations yourself, you can file your taxes online with PriorTax and save yourself a lot of time and hassle! We’ll make sure you receive the maximum refund possible.
The 2015 Tax Season is here! Report your expenses and e-file your 2014 Taxes today!
So what are you waiting for? Create a PriorTax account and file today!
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