Business mileage has the highest per mile deduction: As of the 2015 tax year, you can write off 57.5 cents per mile. If you're self-employed, you can take this deduction on Schedule C as one of the costs of doing business, so it directly reduces your self-employment taxes and your income taxes. If you work as an employee, however, the deduction is a miscellaneous itemized deduction, which allows you to deduct only the portion that exceeds 2 percent of your adjusted gross income, making the deduction substantially more limited. In addition, you can't deduct the cost of driving from your home to your regular place of work.
If you drive for charitable purposes, you can add the mileage deduction to your charitable contributions for the year. However, the mileage rate is substantially lower: As of 2015, you can deduct only 14 cents per mile. For example, say you drive 100 miles per year delivering meals for a charity. You can add $14 to your charitable donation deduction, which you can claim only if you itemize your deductions.
The distance you drive for medical care can also increase your tax deductions. As of 2015, the mileage rate for medical miles is 23 cents. Medical miles include driving for yourself, your spouse or a dependent. But they don't include the cost of driving to a different city for medical treatment for purely personal reasons, such as if you wanted to have surgery in a distant city to be closer to family during the recovery. For example, if you drive your child 20 miles for medical treatment, you can include an additional $4.60 in your medical expenses. However, the medical expenses deduction permits you to deduct only the expenses that exceed 10 percent of your adjusted gross income.
If you qualify for the moving expenses deduction, you can include 23 cents per mile you drive. To qualify for the deduction, you must move for business purposes, your new place of work must be at least 50 miles farther from your old home than your old place of work, and you must work full time for at least 39 weeks in the first 12 months after the move. You're allowed to deduct the miles from one trip from your old home to your new home. For example, if you drive 250 miles to get from your old home to your new home, you could add $57.50 to your deduction. Deduct your moving expenses as an adjustment to income.
Impact of Reimbursement
You can't claim a deduction for any part of the mileage for which you're reimbursed. For example, say your company reimburses you 20 cents per mile when the standard business mileage rate is 57.5 cents. When figuring your deduction, you can deduct only37.5 cents per mile.