Business Owners Beware! The IRS Has Made a Rare Mid-Year Mileage Rate Change
For most years, the IRS sets the mileage deduction rate for business use of personally owned vehicles and leaves it at that rate for the entire year. In those cases, the business owner taxpayer will need to keep track of and report the total number of miles driven for the year, the number of business miles driven, the number of commuting miles and the number of personal miles, so that the IRS knows how many miles are eligible for the business mileage deduction (commuting and personal miles are not eligible). This year, the IRS has done something unusual, but not unprecedented, in that they have changed the deduction amount halfway through the year.
How does that affect you as a business owner? This year, instead of one total for each of the previously mentioned types of mileage, you will now need a separate total for the first half and the second half of the year. Since we have already passed the halfway mark for the year, if you have not done so already, you will need to total up those various mileage numbers NOW and start a new tally for the second half of the year.
And remember, proper tax planning helps to avoid unnecessary taxation, so see a tax planner today!