Mileage - The forgotten deduction
In today’s economic environment, it is important to save money wherever and whenever possible. If you are itemizing your deductions like most people do, one area you may be overlooking is mileage you traveled in service of charitable organizations.
Many people give regularly to a church or some other organization with monetary support. However, if you are like me, you also donate time to help with various causes throughout the year and you have to drive to those causes in your car.
For example, my church sponsors a youth basketball league. I volunteer time as a referee on Saturdays during the season. It is a 16 mile round trip from my home to church each time I drive it. Also, our men’s group periodically cooks a meal at a halfway house in our community. The round trip mileage to that is around 20 miles each time. If you are a regular volunteer, these miles can start to add up faster than you think.
In 2009 the standard deduction rate for miles in service of a charitable organization was $.14 per mile. Obviously this is not a significant amount but it is at least something. If you drive 500 miles each year in support of some type of charitable organization that would be an additional donation of $70 per year. The average tax rate (state and federal) is around 28% so that would be a savings of $19.60 in your pocket. While I realize this is not a lot of money, it is something. It is a couple of lunches, a subscription to a magazine, or some gas in your tank. That is the way you should view it if you are a cost conscience consumer. The work involved in collecting it is minimal; it’s a line on your tax return.
The important thing to do is to accurately record your mileage. I have a mileage log I keep where I write down the date of the trip, the amount of miles, and a few words about what it was. You have to remember to log each trip that qualifies. If you specifically volunteer, those are obvious trips. However, there may some less obvious trips you make as well. Things such as picking up items for an event at the church could qualify. Also, let’s say you donate blood at the local Red Cross station - you have to drive there don’t you?
You should try keeping a mileage log and see how many miles you log during the course of the year. If you feel it is a waste of time, don’t do it next year. However, as I mentioned earlier, you might be surprised at the miles you are actually driving over the course of the calendar year. If you have questions, you can always ask your accountant or do your research over the internet. Hopefully next year you will find a few extra dollars in your pocket because you took a few minutes to write down that mileage.
In today’s economic environment, it is important to save money wherever and whenever possible. If you are itemizing your deductions like most people do, one area you may be overlooking is mileage you traveled in service of charitable organizations.
Many people give regularly to a church or some other organization with monetary support. However, if you are like me, you also donate time to help with various causes throughout the year and you have to drive to those causes in your car.
For example, my church sponsors a youth basketball league. I volunteer time as a referee on Saturdays during the season. It is a 16 mile round trip from my home to church each time I drive it. Also, our men’s group periodically cooks a meal at a halfway house in our community. The round trip mileage to that is around 20 miles each time. If you are a regular volunteer, these miles can start to add up faster than you think.
In 2009 the standard deduction rate for miles in service of a charitable organization was $.14 per mile. Obviously this is not a significant amount but it is at least something. If you drive 500 miles each year in support of some type of charitable organization that would be an additional donation of $70 per year. The average tax rate (state and federal) is around 28% so that would be a savings of $19.60 in your pocket. While I realize this is not a lot of money, it is something. It is a couple of lunches, a subscription to a magazine, or some gas in your tank. That is the way you should view it if you are a cost conscience consumer. The work involved in collecting it is minimal; it’s a line on your tax return.
The important thing to do is to accurately record your mileage. I have a mileage log I keep where I write down the date of the trip, the amount of miles, and a few words about what it was. You have to remember to log each trip that qualifies. If you specifically volunteer, those are obvious trips. However, there may some less obvious trips you make as well. Things such as picking up items for an event at the church could qualify. Also, let’s say you donate blood at the local Red Cross station - you have to drive there don’t you?
You should try keeping a mileage log and see how many miles you log during the course of the year. If you feel it is a waste of time, don’t do it next year. However, as I mentioned earlier, you might be surprised at the miles you are actually driving over the course of the calendar year. If you have questions, you can always ask your accountant or do your research over the internet. Hopefully next year you will find a few extra dollars in your pocket because you took a few minutes to write down that mileage.