You can use the IRS Mileage Rates 2015 for some large tax savings through the mileage deduction. These federal mileage rates 2015 are vital to know if you use a personal car for business, charity or medical purposes.
The 2015 federal mileage rates for 1/01/15 - 12/31/2015 are:
The IRS sets the standard mileage rate every year and it involves a variety of factors. These help to offset the costs of using your vehicle for work, charity or medical purposes.
The standard mileage rate covers all your car expenses. This includes gas, oil, major repairs, depreciation and more. It does not cover costs like tolls or auto loan interest. Those can be added on top of the deductions for business car expenses. The IRS generally sets the mileage rates once. But ,during years of gas price volatility, it can revise them mid-year.
If you drive a personal car for business, charity or medical purposes, you could take a valuable deduction¬†using federal mileage rates for 2015. The standard mileage rate method is the simpler way to take this deduction.
To figure out your deduction, multiply your miles by the applicable rate. If you drove 20,000 business miles, your deduction would be $11,500 (20,000 x .575 = $11500). The process would be similar for medical or charity miles. You can also deduct the actual costs of using your business car. The actual expense method requires keeping diligent track of every single cost related to your business vehicle. The majority of taxpayers using the mileage deduction opt for the standard mileage rate.
If you use the standard mileage rate the first year your car is in business, you can switch to the actual expense method the following year. The reverse is not true. If you use the actual expense method the first year, you're stuck with it through the life of that business car.
For this reasons, it's a good idea to use the standard mileage rate for the first year you use your car for business. In following years, you can always choose whichever method gives you a larger deduction.