Tax Benefits of Logging Mileage

Driving for work can be tedious, but you may come to appreciate your car time when tax season rolls around next year.

If you use your own vehicle travel from the office to a work site, from the office to a second place of business or drive for business-related errands, you can deduct your mileage.  With the start of the new year, it is important to keep careful track of the total miles you drive for business during a tax year – especially since the standard mileage allowance for business driving increased in 2022. 

There are two ways taxpayers can account for their mileage deductions:

  • Take the standard mileage deduction by maintaining a log of qualifying mileage driving.  For the 2022 tax year, the rate is 58.5 cents per mile for business use, up 2.5 cents from 2021.
  • You can also deduct actual vehicle expenses by retaining all receipts and other relevant documentation related to the cost of your business driving.

Either way, you will have to report the total miles the vehicle was driven during the tax year on a specific form, so take note of your odometer reading as early in the year as possible.

To take the standard deduction, keep a detailed log of miles driven.  Business vehicle write-offs can be a red flag for an audit, so be sure to record the odometer reading as well as the purpose of the trip, the starting location, ending location and date. 

If you choose to track actual expenses instead, keep copies of your receipts, including the date, amount and description of service.  You’ll need to organize these receipts into groups including gas, service, repairs, insurance and depreciation.

You can also claim the cost of parking and tolls, so keep those receipts as well.

Note that if you expensed your vehicle, you cannot also claim a mileage deduction.

Medical travel and military moves are also tax deductible – with a two-cent increase in 2022, up to 18 cents per mile.  Charitable driving is also tax deductible, at a fixed rate of 14 cents per mile.