If there is a Interlining China silver lining to preparing your tax return, it is clearly the tax deduction. It is your primary weapon when it comes to reducing the amount you have to pay Uncle Sam. Some deductions are better than others, particularly those that increase yearly.
Of all the deductions that go up and down each year in value, the one you can claim for mileage is the biggie. It is based on a variety of factors including gas prices projected for the year. With oil near $100 a barrel, the deduction is up.
If you've done your takes for a while, you problaby know the mileage deduction as the "business" mileage deduction. While this is the most common appliction of the deduction, two other variations can also be claimed by taxpayers.
The first variation is mileage incurred for medical or moving purposes. Arguable, those are two different subjects, but who is going to argue with the IRS. The third variation is a deduction for mileage incurred in the service of a charity.
The IRS sets the deduction amounts each year based on the projected figures for the next fiscal year. It has just released the 2008 figures and the good news is the deduction amount for business miles has gone up.
For business mileage you incur in the 2008 fiscal year, you can deduct 50.5 cents per mile. If you drive 100 miles on business in a week, for example, you can claim a deduction of $50.50. Of course, you want to keep a running total for the year.
The deduction for the medical and moving mileage for 2008 is much less, coming in at 19 cents a mile. Charitable driving miles are even lower with the rate being 14 cents a mile. Again, make sure you comply with relevant tests before claiming the deduction.
Now for your disclaimer. There are tests that must be met before claiming the above deductions. Make sure you know them and can pass them. Also, keep a booklet of your mileage so the IRS has something to read if it asks for it.