The IRS will let you deduct your auto mileage when using your personal vehicle for the following reasons:
- Business use of your car or truck
- Medical transportation
- Moving related to a job change
- Charitable purposes
When deducting these expenses, you have the option to deduct your actual expenses or the “Standard Mileage Rate”, whichever produces the biggest tax deduction. The IRS is very generous in this area and most of the time the standard mileage rate will give you the bigger deduction as well as being much simpler. Regardless of which method you use, you still need to document your mileage.
The Standard Mileage Rates vary every year (and sometimes mid-year if there is a significant change in gas prices — up or down).
For tax year 2016, business use of a car, van, pickup truck, or panel truck, the rate will be 54 cents per mile. You must subtract any amounts reimbursed by your employer.
Driving for medical or moving purposes may be deducted at 19 cents per mile.
Automobile mileage on behalf of a charitable organization is 14 cents per mile.