What is the 2014 Mileage Rate and How Do You Claim Mileage?
* The information contained in this article is general in nature and is not intended as tax advice.
One of the perks of being a work at home mom is that you get to do a great deal of work at home. This can save you money in many ways including not having to buy a professional wardrobe and not having to drive miles and miles to get back and forth to work.
However, when you're self-employed and do have to drive somewhere for your business, you can claim the mileage for your travel.
How Much Can You Claim?
If you use the car ONLY for business use, you can claim all expenses for operating the car, but that applies to very few WAHMs. Most use their car for both personal and business. In that case, claiming mileage is the best way to go.
There are two ways to claim mileage--standard mileage rate and actual expense method. Calculate the expense you can claim for both ways to determine which will net you a larger deduction.
Standard Mileage Rate
For any work-related travel you made in 2014, you're allowed to claim 56 cents per mile. In addition, you can claim any parking fees and tolls related to business travel.
Actual Expense Method
An alternative method to claiming mileage is to use the actual expenses method. Using this method, you'd add up how much you spent for the year on your car including gas, oil, repairs, tires, insurance, registration, depreciation and licenses.
Simply divide the number of miles you drove for work purposes for the year by the number of miles you drove total to get a percentage. For example, if you drove 10,000 miles in 2014, and 2,000 of those miles were for work, you drove 20% of the time for work. Multiply this number by the total auto expenses paid. If your total car expenses were $5,000, you can claim 20%, or $1,000, on your tax return as business related expenses.
In this same scenario, using the standard mileage method instead, you'd be able to claim $1,120. In this case, you're better off to use the standard mileage deduction.
Where to Claim Your Mileage Expense
You will claim your mileage expenses on Form 1040, Schedule C or Form 1040, Schedule C-EZ.
For more information about claiming mileage, visit the IRS' website.