|by Roger Chartier
Business miles deduction for 2015 and the newer rate for 2016
The IRS calls it a mileage allowance so we refer to it either way here.
For the year 2016 it is down by three and a half cents to 54 cents per mile driven.
That is excellent as the cost of gasoline had dropped dramatically and the mileage allowance for this year is up by a penny and a half.
To get the allowance there are some rules, I will discuss a few of them here.
You have to look at the alternativesWith the Vehicle Depreciation method:
If you have a vehicle that is paid for, cost nothing for an auto payment, and has only has a low insurance cost, this could be best for you. It gets better, when you get more MPG or Miles Per Gallon.
Mileage LogUse a mileage log similar to the one that is free to print on this website. Keep track of the trips and miles for the IRS.
The fact that I will drive 120 miles each way to a job that I do on occasion in the end gets me a deduction or allowance of 240 miles. I drive to many different jobs, and this pays off.
This means that I am getting an advantage of $138.00 - $33.00 = $105.00 to me - for free!
Well almost for free considering the cost of oil every 2 or 3 thousand miles, the cost of insurance and the actual car cost divided up by the long number of years that I have owned it I am still quite a way ahead with the allowance.
If you have a vehicle that sucks up gas at say 8 miles per gallon, you can see how disadvantageous it starts to get.
Use the cheapest fueled allowable vehicle that you can get and save money as long as you use it for business.