You might find it hard to imagine, but it’s true. We have identified taxpayers who have overpaid their taxes by more than $50,000 because of the IRS mileage rates.
On the other hand, we also have physically identified taxpayers who saved thousands because of the mileage rates.
Are you at one end of this spectrum—overpaying or underpaying because of the mileage rates?
This article will help you put money in your pocket by getting this mileage thing right. Furthermore, it will help you debunk the major myth associated with the mileage rates.
Don’t Get Suckered In
Before getting to the cash you can win by choosing the right method, let’s visit the major myth associated with the mileage rates.
When you use mileage rates to figure your vehicle deduction, you don’t need receipts to prove the fixed and variable costs of operating your vehicle. This “no receipts needed” sounds like a big deal, but when you break it down, there is not much benefit.
First, you don’t need receipts to prove your vehicle operating expenses under $75. Why? Because your vehicle is listed property, and the IRS has issued a regulation that says receipts are not required to prove listed property expenses under $75.
The most difficult expenses to track on your vehicle are gas and oil. If you don’t need receipts for gas and oil purchases of less than ... Log in to view full article.