Tax Tips: Writing Off Mileage on Your Tax Forms
April 15th is a few months off, but you want to start thinking about taxes for 2009. Unless, of course, you like the deadline pressure of driving around to find the 24 hour post office in your area on April 14th.
Speaking of driving, the Internal Revenue Service, who often takes, is taking again. For 2008, the rate used to calculate deductible driving costs was 50.5 cents from January to June and 58.5 cents for the last six months. It's all determined by transportation costs, and if you remember, gas prices sky-rocketed in 2008. This year, we're not so lucky. You can only deduct 50 cents per mile for business miles driven.
So what is a mile? It's not just any stretch of 5280 feet.
It can get a little confusing. If you're looking for your first job, you're out of luck. You can't deduct the miles for driving to interviews. But if you have to move for that job, those miles ARE deductible. And you'll only get 16.5 cents per mile for that. Count those miles too, because that new job must be at least 50 miles from your old residence. More information on this regulation is in IRS Publication 521.
If you're looking for a new job in the same line of work, those miles are deductible. (Even if you don't get the job.) But if you're looking to branch out and change your career, you can't deduct those expenses.
When in doubt, write it out
Basically, it makes sense to keep track of everything. Job hunting costs are only deductible if they are greater than 2 percent of your gross adjusted income.
Look at it this way--you're likely going to try and convince a potential employer that you're detail-oriented, conscientious, and careful, right? What a better way to keep honest to both yourself and to your future boss! If you slacked in 2009, January is a great time to establish good habits for the year ahead.
For more information, see the IRS website.