The IRS has just announced that, as of July 1st, Standard Mileage Rate (SMR) for deducting business use of your personal vehicle, will increase by 8-cents per mile -- about 15%.
The NEW RATE will be 58.5¢ per mile as of July 1, up from the current rate of 50.5¢.
Vehicle use for Medical and Moving will also increase on July 1, jumping from 19¢ to 27¢, although the deduction for Charity use will remain at the measly rate of 14¢/mile.
Taxpayers can deduct car expenses if they move or relocate for a job. The car expenses are claimed as part of the moving expenses deduction.
HOW TO COMPUTE THE VALUE OF YOUR BUSINESS-USE DEDUCTIONS
If you are using the 90-day recordkeeping
method described in Chapter 7, the calculation
will be easy. Since the rate change takes
effect at exactly the mid-point of the year,
you will take the mid-point between 50.5-cents
and 58.5-cents, -- which is 54.5-cents -- and
multiply that number by the total number of
business miles driven for the full year.
If you will put 10,000 business miles on
your car this year, this rate increase will
be worth an additional $400 in tax deductions