If your use a vehicle for business, you must keep track of your mileage. It does not matter if you use actual expenses or the mileage rates. You must still be able to document the vehicle was used for business purposes or what percentage was business use. Your business or employer can also reimburse you for business mileage without it being taxable income to you.
If you use the mileage rates the new rates for 2012 will be 55.5 cents per mile. The rates for all four categories of mileage last year and this year are below:


January through June, 2011

Business   .51

July Throuth December, 2011

Business   .555

Jan Through December, 2011

Moving/Medical  .19

charitable   .14

2012 rates

business  .555

Moving/Medical   .23

Charitable   .14

So last year (2011) you must keep track of your business or moving/medical miles as separate totals up to June 30 and after July 1. This happens some years when gas prices increase or decrease and the IRS sees fit to make an adjustment to the mileage rates.

We strongly recommend that you use a mileage log to keep track of your business and non-business mileage. While any method which is accurate, documentable, and is done at the time the mileage is driven is acceptable, the most consistently acceptable method to an IRS agent is a well kept log.

This entry was posted in Income Taxes, Small Business Tax Tips and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *