The 2012 business mileage deduction rate is 55.5 cents per mile effective January 1, 2012. This is the same rate that went into effect July 1, 2011. (The previous rate was 51 cents.) The IRS is clear in that taxpayers deducting business miles should have a log indicating the business purpose of the trip, the destination and the miles driven.
Eligible taxpayers may instead choose to take a deduction based upon actual expenses such as gas, insurance, tolls, repairs or even lease payments. Generally taxpayers will choose the option that results in the largest deduction, but be mindful of these three guidelines in particular: restrictions governing the switch between the two methods, the potential need to use the mileage deduction in the first year of a car’s business use and the intricacies of deducting lease payments.
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