Mileage Deduction
Individuals can deduct some vehicle-related expenses in certain circumstances. Rather than keeping track of the actual costs, you can use a standard mileage rate to compute your deductions.
Mileage rates vary
The rates vary depending on the purpose and the year:
Purpose |
2021 |
2022 |
Business |
56 cents |
58.5 cents |
Medical |
16 cents |
18 cents |
Moving |
16 cents |
18 cents |
Charity |
14 cents |
14 cents |
The business standard mileage rate is considerably higher than the medical, moving and charitable rates because the business rate contains a depreciation component. No depreciation is allowed for the medical, moving or charitable use of a vehicle. The charitable rate is lower than the medical and moving rate because it isn’t adjusted for inflation.
In addition to deductions based on the standard mileage rate, you may deduct related parking fees and tolls.
2018 through 2025 limits
The rules surrounding the various mileage deductions are complex. Some are subject to floors and some require you to meet specific tests in order to qualify.
For 2022, it means that you can’t deduct the mileage, because the TCJA suspends miscellaneous itemized deductions subject to the 2% floor for 2018 through 2025.
If you’re self-employed, business mileage can be deducted against self-employment income. Therefore, it’s not subject to the 2% floor and is still deductible for 2018 through 2025, as long as it otherwise qualifies.
Miles driven for health-care-related purposes are deductible as part of the medical expense deduction. And an AGI floor applies. Under the TCJA, for 2021, medical expenses are deductible to the extent they exceed 10% of your adjusted gross income.
For 2018 through 2025, under the TCJA, moving expenses are deductible only for certain military families.
Substantiation and more
There are also substantiation requirements, which include tracking miles driven. And, in some cases, you might be better off deducting actual expenses rather than using the mileage rates.
We can help ensure you deduct all the mileage you’re entitled to on your 2021 tax return but don’t risk back taxes and penalties later for deducting more than allowed. Contact us for assistance and to learn how your mileage deduction for 2021 might be affected by the TCJA.
© 2021
In addition to deductions based on the standard mileage rate, you may deduct related parking fees and tolls.
2018 through 2025 limits
The rules surrounding the various mileage deductions are complex. Some are subject to floors and some require you to meet specific tests in order to qualify.
For 2022, it means that you can’t deduct the mileage, because the TCJA suspends miscellaneous itemized deductions subject to the 2% floor for 2018 through 2025.
If you’re self-employed, business mileage can be deducted against self-employment income. Therefore, it’s not subject to the 2% floor and is still deductible for 2018 through 2025, as long as it otherwise qualifies.
Miles driven for health-care-related purposes are deductible as part of the medical expense deduction. And an AGI floor applies. Under the TCJA, for 2021, medical expenses are deductible to the extent they exceed 10% of your adjusted gross income.
For 2018 through 2025, under the TCJA, moving expenses are deductible only for certain military families.
Substantiation and more
There are also substantiation requirements, which include tracking miles driven. And, in some cases, you might be better off deducting actual expenses rather than using the mileage rates.
We can help ensure you deduct all the mileage you’re entitled to on your 2021 tax return but don’t risk back taxes and penalties later for deducting more than allowed. Contact us for assistance and to learn how your mileage deduction for 2021 might be affected by the TCJA.
© 2021