Mileage allowance can be defined two ways. One is related to car leasing, where people have an allowance or limit of miles they can travel during the length of the lease. If they exceed this amount, they pay a per mile charge on any excess miles at the lease’s termination. The second definition is more closely related to finances. It is different types of tax deductions for specified kinds of travel, such as for business, work on behalf of a charity, medical travel, or for moving and the types of deductions depend on region.
On the issue of car leasing, consumer experts advise customers to carefully evaluate mileage allowance based on their own habits of use. Like many other aspects of car sales and leases, the amount offered initially may be negotiable. Though the excess charge of about $.10 US Dollars (USD) to $.15 per mile may not seem much, it can quickly add up to significant amounts. People who drive frequently should work to negotiate a higher mileage allowance that more realistically reflects driving habits, so they’re not presented with higher fees at the end of a lease.
The other form of mileage allowance requires similar attention to detail. For taxpayers to get the most out of these deductions, they have to keep rigorous track of the different types of travel that qualify. Keeping good records can help avoid unwelcome audits. Most financial experts suggest people keep a log book that includes information on type of travel, the addresses of starting and finishing locations, and the odometer reading at start and finish of the travel. A separate book or section of the book could be used if two or more vehicles are interchanged.
For each mile claimed there is a specific deduction amount or mileage allowance that can be taken, and different types of travel are deducted at different levels. Business travel in places like the US offers a deduction of about $.50 USD per mile. Medical and moving travel have an allowance of $.165 USD per mile and charitable travel is $.14 USD for each mile. These are the deductions as of 2010, and they are subject to change each year. The 2010 allowances are a decrease in earlier deduction amounts.
There may be some other types of mileage allowance deductions, depending on region. It’s possible that travel to education can be included as part of other deductions that are taken. Taxpayers are always advised to find out their available credits or deductions, and this may be accomplished through careful reading of a tax code, through tax advice services or with the help of accountants or tax attorneys. Given the complexities of deductions for huge amounts of travel, having an accountant or attorney that can help prepare a return is often advised.
