Most people are aware that they can take a mileage deduction when they drive their car or other vehicle for business. However, it is also possible to deduct certain types of non-business driving.
You Must Itemize Your Personal Deductions
First, to deduct any nonbusiness driving, you must itemize your personal deductions instead of taking the standard deduction. You should itemize only when your total itemized deductions on IRS Schedule A exceed the standard deduction for the year—$6,200 for singles and $12,200 for married filing jointly in 2014. Your itemized deductions include such items as mortgage interest and taxes you pay for your residence, charitable contributions, medical expenses, unreimbursed employee expenses, state income taxes, and certain other items.
Driving as a Medical Expense
If you do itemize, you can deduct driving costs as part of the medical expense deduction. However, this deduction has its own limitations. You may deduct your medical expenses only to the extent they exceed 10% of your annual adjusted gross income (but, if you’re over 65, the threshold is 7.5% of AGI through 2017).
You can include in your medical expenses amounts paid for transportation primarily for, and essential to, medical care. This includes things like driving to the doctor, dentist, hospital, or pharmacy. You can also include the cost of driving your child for medical care. Regular visits to see a mentally ill dependent may also be deducted, if they’re recommended as a part of treatment.
You cannot include in medical expenses:
- the cost of going to and from work
- travel for purely personal reasons to another city for an operation or other medical care
- travel that is merely for the general improvement of your health, or
- the cost of operating a specially equipped car for other than medical reasons.
You can deduct your medical-related driving costs one of two ways: using your actual expenses, or the standard medical mileage rate.
If you use the actual expense method, you can only the deduct the cost of gas and oil, when you use your car for medical reasons. You cannot include depreciation, insurance, general repair, or maintenance expenses. This differs from the way the actual expense method works when you drive for business.
If you use the standard medical mileage rate, you may deduct 24 cents per mile driven for medical reasons. This is much lower than the standard mileage rate applicable to business driving—57.5 cents per mile in 2015.
No matter which method you use, you can also include parking fees and tolls.
You should use whichever method give you the largest deduction.
Example: In 2015, Bill drove 2,800 miles for medical reasons. He spent $500 for gas, $30 for oil, and $100 for tolls and parking. His total using the actual expense method is $630. His total using the standard medical mileage rate is $672 (24 cents x 2,800 = $672). He adds the $100 tolls and parking for a total of $772. Bill includes the $772 of car expenses with his other medical expenses for the year because the $772 is more than the $630 he figured using actual expenses.
Driving for Charity
Charitable contributions are also deductible when you itemize your personal deductions. You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses that are directly related to the use of your car in giving services to a charitable organization. For example, you can deduct your driving expenses if you drive each week to a local hospital to volunteer.
There are two ways to deduct charitable driving. You can deduct your actual expenses, which primarily consist of gas and oil. You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance.
Instead of deducting your actual expenses, you can use the standard charitable mileage rate of 14 cents a mile. The 14 cents per mile rate is very low—it hasn’t been adjusted in many years. Thus, you’ll certainly be get a larger deduction if you use the actual expense method.
You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate.
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MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.