There are many situations where you may use your personal car for business purposes. When properly recorded, even short trips around town can add up and allow you get the most out of your mileage deduction. If you are self-employed or an employee who is not already reimbursed for transportation costs, there are some deductions you can take. The IRS states that you can take a mileage deduction of 54 cents per mile in 2016 (2015 was 57.5 cents per mile).
Qualifying Mileage Deductions
- Client or customer visits: Any trips from your principal office to visit your clients or customers for business purposes is deductible.
- Travel between offices: If your company has more than one office or work site you can take a mileage deduction for traveling the distance between them.
- Buying supplies: Business related errands such as trips to the post office, bank, or supply stores can be deducted.
- Airports: Driving to and from the airport for a business trip qualifies as a mileage deduction.
- Meals and entertainment: You can take a deduction for trips made to meet clients for coffee or dinner.
The mileage between home and work is NOT counted as business mileage and therefore is not deductible. This applies even if you are working during the commute, like making business calls. An exception to the commuting rule is if you are traveling between home and a temporary work location. A temporary work location is somewhere you reasonably expect to commute for less than one year.
Tracking your Business Miles
Like other deductions, it’s important to have proper documentation for your business mileage. The IRS requires that the date, destination, business purpose and miles driven be documented. The documentation can be written or electronic. There are several free mileage tracking apps such as Mile IQ, Track My Drive and Trip Log that can be used for tracking.
For any other questions related to business mileage, contact us.