J.K. Lasser's Small Business Taxes 2013: Your Complete Guide to a Better Bottom Line

Standard Mileage Allowance

Instead of keeping a record of all your expenses and having to calculate depreciation, you can use a standard mileage allowance fixed by the IRS to determine your deduction for business use of your car. You can use the standard mileage allowance in 2012 whether you own or lease the car. The cents-per-mile allowance takes the place of a deduction for gasoline, oil, insurance, maintenance and repairs, vehicle registration fees, and depreciation (if you own the car) or lease payments (if you lease the car). Towing charges for the car are separately deductible in addition to the standard mileage allowance. Parking fees and tolls, interest to purchase the vehicle, and personal property tax to register are also allowed in addition to the standard mileage allowance. Deductible parking fees include those incurred when visiting clients and customers or while traveling away from home on business. Fees to park your car at home or at your place of work are nondeductible personal expenses.

The standard mileage allowance for business use of a car in 2012 is 55.5 per mile. Rural letter carriers who use their cars to deliver mail can deduct the amount paid to them by the U.S. Postal Service as an equipment maintenance allowance. The IRS standard mileage rate is adjusted annually for inflation. See Table 9.8 for mileage allowances based on the amount of driving.

TABLE 9.8 ...