Business mileage deduction increase

B

brwill2005

New member
I just read that the IRS has increased the business mileage deduction for the last six months of 2008. Starting July 1st the deduction will be 58.5 cents per mile, up from 50.5 cents per mile. This is good news for those of us who use this type of deduction for tax purposes. BTW, what method are most people using for business mileage; standard deduction where you track each car related expense, or mileage deduction, where you keep track of the miles.
 
brwill2005 said:
BTW, what method are most people using for business mileage; standard deduction where you track each car related expense, or mileage deduction, where you keep track of the miles.
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I haven't decided yet but I'm tracking both for when I file. Is there a rule of thumb for each method's advantages in relation to total miles vs expenses?



I assume at a certain point of driving that the mileage outweighs the expenses, just don't know where that is for me and changes on a case by case basis. Fixed expenses like ins/loan/reg/others aren't necessarily changed by an increase in driving. Does that make sense?
 
StrutMotors said:
I haven't decided yet but I'm tracking both for when I file. Is there a rule of thumb for each method's advantages in relation to total miles vs expenses?



I assume at a certain point of driving that the mileage outweighs the expenses, just don't know where that is for me and changes on a case by case basis. Fixed expenses like ins/loan/reg/others aren't necessarily changed by an increase in driving. Does that make sense?
Click to expand...



If you are using both, you could determine which gives you the most deduction at the end of the year. Once you use the standard deduction, you can not go back to using the mileage deduction. If you initially use the mileage deduction, you are allowed to switch to the standard deduction at a later time. I guess it all comes down to how much you drive and how much your payments and maintenance are for you vehicle. I use a car that is paid off and drive quite a bit, so the mileage deduction gives me the greater deduction. If I buy a newer vehicle, obviously I will have to re-examine this.
 
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