Mileage Deductions
Posted by taxguru on February 16, 2005
Q:
Subject: mileage deductions
Can you tell me if the new rate of 40.5 up from 37.5 a mile can be used in my tax returns filed now feb of 05 for my 2004 income tax. Or do i have to wait till the end of the year to apply the new rate
A:
That is a new, but very wrong, interpretation of the rules for claiming business mileage deductions. When you file the tax return is irrelevant. Business miles driven during 2004 can use the 37.5 cents per mile standard rate, or the prorated actual expenses, whichever gives you the best total deduction.
The new rate of 40.5 cents per mile is only available for business miles driven during 2005, which will obviously be calculated on your 2005 1040 some time after the end of 2005.
It sounds as if you could benefit from the services of a tax pro to help make sure you interpret the tax rules properly.
Good luck.
Kerry Kerstetter
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