Good news if you use your car for business, medical or moving purposes: The IRS is raising the tax-deductible mileage rate to offset high gas costs.
Starting July 1, when you use your car for business, you'll be able to write off 55.5 cents (the standard mileage rate) for each mile you drive through December 31, 2011. This is a 4.5-cent increase from the amount you could deduct the first half of the year. For more information about using the standard mileage rate when deducting expenses for the business use of your car, see Tax Topic 510.
The standard mileage rate for calculating deductible moving or medical expenses also will increase by 4.5 cents to 23.5 cents a mile. If you use your car to move and the move is connected with taking a new job at least 50 miles farther from your old home than your old job was, you can write off 23.5 cents for each mile you drive. You don't have to itemize on your tax return to claim this deduction. For more information, see Tax Topic 455, Moving Expenses.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You can use the standard mileage rate when tallying transportation costs when you drive your car to the locations where you receive medical care. However, you must itemize to deduct medical expenses, and you get a tax break only to the extent your total unreimbursed medical costs exceed 7.5% of your adjusted income. See our Taxopedia for more information about deducting medical expenses.
The standard mileage rate for using your car to provide services for charitable organizations -- 14 cents a mile -- will not increase. This rate is set by statute, not the IRS.
To maximize your deductions year round, subscribe to the Kiplinger Tax Letter.
-
Ten Cheapest Places to Live in TexasProperty Tax Looking for a cheap place to live in Texas? Look no further. These counties have the lowest property tax bills in the Lone Star State.
-
AI Is Missing the Wisdom of Older Adults: What It Means for YouAI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
Homeschoolers: 529 Plan Savings Could Soon Work for YouSavings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Ohio Announces Two-Week Sales Tax Holiday Amid Tariffs, High PricesState Tax Ohioans won't want to miss out on savings as pressure from tariffs spikes prices.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the SenateTax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers QualifyTax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
-
New 'No Tax on Tips' Bill Approved: What to Know NowIncome Taxes Will you stop paying taxes on your tip income this year?
-
Millions Could Lose SNAP Food Benefits Under Trump Tax Cut PlanTax Policy The House Agriculture Committee approved nearly $300 billion in cuts to SNAP benefits, putting many at risk of hunger.
-
Missouri Leads Capital Gains Tax Repeal: Will Your State Follow?State Tax As one state becomes a test case, policymakers and taxpayers across the U.S. will be watching closely to see what happens next.
