Saturday, March 6, 2010
Are Tolls and Mileage From My Job Tax Deductible? By Chintamani Abhyankar
Posted by sir wil at 10:25 AMWhether or not you can deduct tolls and mileage on your taxes depends on when you paid the tolls and put on the mileage in question. For instance, you cannot deduct tolls or mileage for driving from home to work. You can only deduct tolls and mileage incurred during business driving. Business driving is the driving you do from one client to another, driving from work to school for company related training, or driving from one employer to another. Any tolls or parking fees paid or miles driven while performing these tasks are tax deductible.
The IRS mileage deduction for 2009 is 55 cents per mile. Tolls and parking fees are deductible at the rate they were incurred.
You should keep accurate records to support all of your driving claims. The records should declare the day and date of the drive, the distance of your drive, where your drive began, where your drive ended, and the purpose of your trip.
The IRS offers you the option of determining what it actual costs you to drive your vehicle, rather than relying on their mileage rate. To do this requires quite a bit of bookkeeping, as you will need to keep track of all costs associated with using your vehicle for business, such as depreciation, insurance, repairs, fuel, tolls, and fees. Then, you must keep a record of all the miles you drove during the year and determine what percentage of those miles were driven for qualified business purposes. Then, you multiply that percentage times the cost of operating your vehicle. In example, if your costs to drive the vehicle were $5000 and the car was driven a total of 10,000 miles, with 5,000 of those miles used for business, you would multiply 50% X $5500 for a total of $2,750.
There are also deductions allowed for medical mileage, charitable mileage, and moving mileage. If you drive to receive medical care, you can deduct that mileage at the rate of 24 cents per mile. If your new job is at least 50 miles away from your prior residence, you can deduct 24 cents per mile for the move. If you drive to a site to perform charitable work or if you use your car to do driving for a charity, you can deduct that mileage at 14 cents per mile.
Whenever deducting tolls, parking fees or mileage, remember to keep very accurate records. The IRS is known to be tough when it comes to driving deductions.
Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. His famous Tax eBook "Stop donating your money to IRS" which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax. Just visit his website http://www.planningyourtax.com/ and claim your FREE eBook
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