How do you calculate mileage for income tax?
When you are a part of a business, a charitable organization, and/or employed by a medical facility, it is very important to keep track of the amount of miles you drive while on the job. This is because when a business, charitable organization, and medical facility files their taxes they can have a good chunk of their income exempt from taxation. That is because the IRS allows business traveling to go against taxable income. It is important that when under these circumstances, you calculate the number of miles you have driven that are considered job related, and multiply that amount by the overall federal mileage rate for the respective industry. The rate for business is $0.537 per mile for businesses, $0.14 per mile for charitable organizations, and $0.17 per mile for medical facilities. For example, say you run a business and you accumulated over 10,000 miles driven during the year related to your business. You would then multiply that by the business mileage rate, and that would give you $5,370. That money would then be taken from your income as exempt from taxes. So with that, if you had $100,000 in income, only $94,630 of that would be taxable by the IRS.