The government, or should I say the IRS, changes the allowance or deduction amount for categories each year.
The highest deduction amount for 2014 is,
- Business Miles – $0.56
This is a half of a cent lower for 2014 than from 2013 which was 56 and half cents per mile.
Two ways to deduct
There is more than one way to deduct the business use of your motor vehicle as a sole proprietor.
The way described for Mileage Allowance or deduction on this website is very good for a lot of people as it pays well. If you have a vehicle that is paid for, and has a low maintenance rate, then this is often a better choice than the “Actual Expense” method.
If your vehicle gets a good MPG or Miles Per Gallon rate, then it might be better to use the mileage deduction if other factors fall into place. You will be required to use a mileage log.
You can download a free mileage log to use. The log asks simple information for each business trip with your vehicle.
They usually are the date, odometer start, odometer end, from, to, total miles, and parking etc.
The “Actual Expense”
Method uses the actual cost of gas oil repair etc, whereas the Mileage Deduction method uses the amount of miles driven at a set rate for a deduction.
These two methods can apply to gain a deduction for both allowance/deduction for business, medical and charity.
But I digress…
The method used for a Mileage allowance sets the rate for business miles at a high point each year.
The medical mileage rate is set at a rate that is lower.
The charity rate is lower than both of the others.