Sunday, June 24, 2012

Deducting Miles Driven on profit of a Charity

Irs Form 1040 - Deducting Miles Driven on profit of a Charity
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A taxpayer may regularly deduct 14 cents per mile for all miles driven on profit of a charity (Section 170(i)). The original purpose of the tour must be to contribute to the mission of the charity. In addition, the tour must not supply the taxpayer with any necessary number of personal pleasure, recreation, or vacation (Section 170(j)). Further, a taxpayer may not deduct the miles driven on profit of a charity, other than a church, if the purpose of the tour is to sway legislation (Section 170(f)(6)).

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For example, if a taxpayer drove her personal automobile a total of 500 miles to fetch and distribute wheelchairs on profit of a great charitable club such as LifeNets http://www.lifenets.org/, the taxpayer could deduct .00 (500 miles x 14 cents per mile). However, if a scoutmaster took a troop of Boy Scouts to summer camp and spent a week there with them, the scoutmaster may not deduct the miles because the trip to the summer camp has a necessary element of personal pleasure, recreation, or vacation.

For miles for miles driven for relief efforts linked to Hurricane Katrina after August 25, 2005, straight through December 31, 2006, a taxpayer may deduct 70 percent of the approved mileage rate in result for enterprise miles. If a taxpayer receives a repayment from a charity for miles driven for relief efforts linked to Hurricane Katrina after August 25, 2005, straight through December 31, 2006, the taxpayer may exclude the repayment from gross revenue up to 100 percent of the approved mileage rate for enterprise miles.

The approved mileage rate for enterprise miles was 40.5 cents per mile from August 25, 2005, straight through August 31, 2005. The approved mileage rate for enterprise miles increased to 48.5 cents per mile from September 1, 2005, straight through December 31, 2005. The approved mileage rate for enterprise miles driven in 2006 is 44.5 cents per mile (Rev. Proc. 2005-78).

If a taxpayer does not receive any repayment from a charity for miles driven for relief efforts linked to Hurricane Katrina, the taxpayer may deduct 29 cents per mile for miles driven from August 25, 2005, straight through August 31, 2005; 34 cents per mile for miles driven from September 1, 2005, straight through December 31, 2005; and 32 cents per mile for miles driven in 2006 (Rev. Proc. 2005-78).

If a taxpayer receives repayment from a charity for miles driven for relief efforts linked to Hurricane Katrina, the taxpayer may exclude from gross revenue up to 40.5 cents per mile for miles driven from August 25, 2005, straight through August 31, 2005; 48.5 cents per mile for miles driven from September 1, 2005, straight through December 31, 2005; and 44.5 cents per mile for miles driven in 2006 (Rev. Proc. 2005-78).

In expanding to the approved mileage rate, a taxpayer may deduct the cost of parking fees and tolls incurred while driving an automobile on profit of a great charitable club (Rev. Proc. 2005-78).

If a taxpayer has any doubt about the status of an club as a great charity, the taxpayer may consult Irs Publication 78 at the Irs Web site: http://www.irs.gov/

A taxpayer claims the deduction for miles driven on profit of a charity on program A of Form 1040. The deduction for miles driven on profit of a charity is included with the amounts for cash contributions on the same line of program A of Form 1040.

A taxpayer should have good records such as a mileage log to document the deduction. The burden of proof is on the taxpayer to prove the number of all deductions claimed.

If the taxpayer's total itemized deductions do not exceed the approved deduction amount, the taxpayer will regularly not receive any advantage from the deduction for miles driven on profit of a charity.

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