2014 Mileage Rates Will Drop
Generally the IRS adjusts the standard mileage rate available for business vehicle deductions every year. This mileage rate is based on a study of the fixed and variable costs of operating an auto. In certain years the IRS has made mid-year adjustments when necessary to better reflect the real cost of operating an auto in light of rapidly rising gas prices.

However, this is the first year in quite a while that the standard mileage rate deduction will go down. The deduction decline is only .5 cents per mile (amounting to .56 cents for business, and 23.5 cents for medical). This decline itself reflects the government’s view that transportation costs will remain stable.

Here is a quick summary (or recap) of deducting business use of a vehicle

You must be able to substantiate:

  • The date, the mileage and the business purpose of the trip.
  • If away from home then, the substantiation should describe list the destination and the purpose.
  • Total mileage for the year

Summing up:  business use is allowed if it is easier and not mixed with personal use, such as a round trip, or several stops in one business trip.

To get a deduction, the taxpayer must maintain an account or log book that shows expenses,  trip sheets or other records.  Likewise, there also need to be recorded the approximate time such expenses occur.

Finally, new apps are available to help determine your deduction. However, I have not yet seen one that will use the GPS function of a cell phone to actually track all of this information for you. Hopefully, that will be  coming soon.

If interested, a generic form that can be used and distributed for automobile expenses  is here

Post by Doug Zandstra www.dougzandstra.com