Mileage rates are down
If you use your car for business, for medical travel, moving, or for charitable purposes, you can deduct the cost from your taxes. The easiest way is to use the mileage rate set by the Internal Revenue Service, rather than keep receipts to substantiate costs such as gasoline and oil.
For 2014, the mileage rate for business travel is 56 cents a mile (down slightly from last year; so is the price of gas). A worker who is reimbursed under an "accountable" plan won't be taxed on the reimbursement but can't deduct the expense. The rate for medical or moving reasons is 23.5 cents a mile. The rate for charitable purposes remains 14 cents. That low rate is fixed by Congress and the IRS cannot change it. In addition, you can deduct tolls and parking.
It's important to keep good records of where you go and for what purpose. Notes on a calendar or datebook can be adequate documentation.
For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.
He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.
An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.
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