Quote:
Originally Posted by redpoint5
As I understand it, the mileage deduction is a reduction in taxable income that applies regardless if you take the standard deduction or itemize deductions. 15% of $4,510 = $677.
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In most circumstances mileage is a business expense that gets deducted on Schedule C, in order to figure your actual business profit. In addition to the income tax, though, you also have to pay Social Security/Medicare taxes on that business income (Schedule SSE). IIRC that's about ~12.3% of your business profit, so about $1230 less tax.