The Internal Revenue Service (IRS) offers taxpayers the option to either take a standard deduction or to itemize their deductions on their taxes. If you have limited mileage and toll expenses but not significant other deductions, such as medical costs, mortgage interest or charitable donations, it is unlikely that you will benefit from not taking the standard deduction. In 2012, the standard deduction is $11,900 for married couples filing jointly, $8,700 for heads of household and $5,950 for singles or married individuals who file their own tax returns. The IRS allows vehicle expenses and tolls incurred for business as an employee to be deducted if you itemize. If you are self-employed, you would deduct your business mileage and tolls as an expense on Schedule C and do not have to itemize your deductions.
What Mileage and Tolls Count?
Whether you can deduct tolls and mileage for your job depends on when you drove the miles and paid the tolls. According to the IRS, vehicle expenses cannot be incurred by driving from your residence to your job. Instead, business miles are those driven on company business, such as driving to visit a prospective client, driving from one employer to another or driving from work to school on a temporary basis for job-related education. Any miles driven or tolls and parking fees paid during these trips are deductible.
How Much to Deduct?
For 2012, the IRS allows mileage to be deducted at the rate of 55.5 cents per mile for business purposes. The rate for 2013 is 56.5 cents per mile. Tolls and parking are fully deductible for business purposes.
In order to deduct mileage, tolls and parking for business purposes, you must keep records to support your claims in case you are audited by the IRS. These records should show the dates of your trips, where you drove to and from, how far you drove and your purpose for making the drive.
Calculating Acutal Costs
The IRS gives taxpayers the option of calculating the actual costs of using their vehicles for business purposes, rather than using the standard mileage rate. To do this, keep track of all vehicle expenses related to business use, including depreciation, insurance, fees, repairs, tolls and fuel. Then keep records of all mileage driven during the year and determine what percentage of the time the car was used for business purposes. Next, multiple the percentage by the costs of operating the car. For example, if your total costs for the car were $5,500 and your mileage records show that is was used for business purposes for 5,000 out of the 10,000 miles it was driven that year, multiply 50 percent times $5,500 for a deduction of $2,750.
Other Mileage Deductions
The IRS also allows deductions for medical mileage, moving mileage and charitable mileage. If you drive to get medical care, that mileage is deductible at the rate of 24 cents for 2013. Moving mileage can be deducted when your new job is at least 50 miles away from your previous home; it also is 24 cents per mile. Charitable mileage includes driving to a site to perform charity work or driving on behalf of a charitable organization. This mileage is deductible at the rate of 14 cents a mile.