How to Deduct Your Gas Mileage

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The Internal Revenue Service (IRS) allows taxpayers to claim a tax deduction for the money they spend on gas and other vehicle expenses for a car that is used for business purposes. In order to claim the deduction, you will need to itemize your deductions, which disallows you from taking the standard deduction. To calculate the value of your deduction, you can either use the standard mileage rate or the actual expenses rate.

Calculate the total amount of money you spent on your car, including gas purchases and registration fees and repairs, during the year. You should have receipts to document these costs.

Determine the total number of miles you drove during the year. You can find this by subtracting the odometer reading from the beginning of the year from the odometer reading at the end of the year.

Calculate the number of miles you drove for business purposes. The IRS considers business uses to include miles you drove while at work, going from job to job or going from a job to school. However, the IRS does not allow you to include miles that you drove to and from your job.

Divide the number of miles driven for business purposes that you calculated in step 3 by the total number of miles driven during the year that you determined in step 2. For example, if you put 10,000 miles on your car and 2,000 were for business purposes, you would get 0.2.

Multiply the decimal from step 4 by the total amount of money you spend on your car from step 1. For example, if you spent $3,000 on your vehicle, including gas, for the year, you would multiply by $3,000 to find you could deduct $600.

Multiply the number of miles driven for business purposes by the standard mileage rate for business miles. For the 2009 tax year, the rate is $0.55 per mile. For example, if you drove 2,000 miles, you would get $1,100. You do not need to know the total miles driven to calculate your deduction using the standard mileage rate.

Use the larger of the deduction values in step 5 and step 6 as an unreimbursed employee expense on Schedule A, line 21.

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About the Author

Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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