2012 Mileage Deduction

IRS Business Mileage Deduction

By Roger Chartier:

The IRS mileage deduction or IRS mileage allowance for 2012 is set by the Internal Revenue Service. 

Taking the mileage deduction for miles driven is often the most advantageous way to get the greater benefit as far as taxes are concerned .

If you have a vehicle that is paid for, cost nothing for an auto payment and has only the lowest mandatory insurance you can do well this way.

On top of that add good MPG or Miles Per Gallon and you have a winning combination.

What is the mileage rate for 2012?

For this year you will be able to deduct 55.5 cents per mile (Fifty-five and a half cents) for business miles that you drove. That is the mileage rate for 2012.

It changes every year and sometimes it will change mid year there could be a change as there was for the mileage rate change in 2011.

Be sure to keep track of the miles in a timely fashion using this free printable mileage log.

If you drive an average of 100 business miles a day for 5 days a week, by the end of a year you would have an IRS mileage tax deduction or a tax allowance of $14,430.00.

The other great idea to take advantage of the Internal Revenue Service mileage allowance is to use a low cost economy car if you can.

If you can use a vehicle that gets 30 miles to the gallon and drive the same miles as above, at $3.50 a gallon you will pay only $910.00 for gasoline and 10 oil changes each costing $20.00 = $200.00 so your expense would be $1,100.00.

Throw in tire replacements at $300.00 tops and your realistic expense is $1,400.00 which gives you an advantage of $13,030.00 per year.

Do that for two years ( $26,060.00) and you more than paid for a brand new vehicle,

Thank you Uncle Sam.

The only thing that you can do otherwise is use the depreciation method.