|by Roger Chartier
2014 Business Mileage Deduction
Well every year the mileage allowance, as the IRS likes to call it, changes. This year they have gone from the 2013 rate of 56.5 cents per mile down to 56 cents per mile for 2014.
The reason that people are so excited to get news about what the mileage rate is going to be is that they want to get an idea about where they are going to stand with the government as far as deductions for taxes.
The small business person who drives his or her car or van around doing business every day usually pays off the loan on the vehicle sooner than later and most are paid for right now.
So the cost of the vehicle is now pretty much gone, but the deduction for costs are still around.
That is one way to do taxes, the actual costs of running the vehicle. I prefer the mileage method because it is always so advantageous for a business person to take.
If I sometimes have a jobsite that is 50 miles from home
The round trip is 100 miles and that will get me a mileage allowance of $56.00 for the trip.
Now that pays a lot more than the gas will cost. I get 21 miles to the gallon on my car, and I use just under 5 gallons for the trip. The cost currently for gas is about $3.75 per gallon.
I will use a bit less than $18.75 to pay for gas but collect a deduction of $56.00.
So the thing here is that $56.00 - $18.75 = $37.25 and that remainder is all for me.
Of course, I have to pay for oil changes
Once every 3000 miles and although the vehicle is long ago paid for it did cost it's price.
Still I am way ahead financially, and as I work nearly every day the numbers add up to a large amount of money for me to keep at tax time.