There can be potentially huge tax savings by deducting your vehicle mileage. There are many reasons that your mileage may be tax deductible. If you must travel for your job and use your own vehicle then those miles are tax deductible.

You can choose to take these optional standard rates if you are an employee, self-employed, and all other taxpayers if you have vehicle operating costs that fall in to tax deductible categories.

What is deductible?

• Mileage for Work Related Travel

• Medical Travel Mileage

• Moving Travel Mileage

• Servicing for Charitable Organization Mileage

Mileage Deduction Amounts

• 50.5 Cents Per Mile For Business

• 14 Cents Per Mile For Charitable

• 20 Cents Per Mile For Medical

• 20 Cents Per Mile For Moving

The rate for business travel has recently increased. It was previously at 48.5 cents per mile for 2007. Due to the current state of the economy the IRS has offered an even higher tax break that will cover mileage deductions from July 1st, 2008 through December 31st, 2008. The rate for business purposes for this six month window will be 58.5 cents per mile. The rate for moving or medical purposes for this six month window will be 27 cents per mile.

The deduction for charitable travel will remain the same. The reasons for this increase are the higher price with fuel and the increased price of vehicles. The standard rate for business, moving, and medical comes from an annual study that is done to determine the costs of operating a vehicle. The IRS will usually hire an outside company to complete this study. The standard rate for charitable travel is set by a previous statute and has not seen any recent increase.

To learn more about travel mileage tax deductions please visit TurboTax Online. TurboTax Online offers free tax software to help you maximize your vehicle mileage deductions.