Tax Deduction for Work-Related Driving
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Are you doing a lot of driving for your residency? For example, some specialties like orthopedic surgery and ophthalmology will have 1 resident covering several hospital sites (HVSH, SG, DRH/HUH) and clinics, and will drive between all 3 sites several times in one night while on call.
In such situations, you may be eligible for mileage reimbursement while filing your income taxes.
Please see below for some advice from our ortho program to individuals encountering similar scenarios.
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So I have compiled a list of the residents responses who have been doing logs of their miles. I also did some research as far as what is actually stated by the IRS and a few helpful websites. Below is the residents responses and helpful websites. I think offering these links to residents could be helpful, maybe even someone could come up with an instruction guide to be posted on the resident website.
Please be mindful that we do a considerable amount of driving from site to site, sometimes visiting 3 – 4 different sites within a day. The amount of work that we put in to calculating/keeping track of our logs is because is can produce a SIGNIFICANT reduction in our tax burden, and some programs or residents may not experience the same financial relief.
Anonymous resident responses from the Ortho program:
1. Under the deductions portion of your taxes, there’s an automobile section, easiest way is to multiply your total mileage by the IRS business standard mileage rate (changes every year, typically around 55 cents a mile).
If you have an expensive car (and more time of your hands), you can calculate actual expenses using car depreciation, licenses, oil, tolls, lease payments, insurance, parking fees, repairs, tires, and gas… but I don’t recommend it.
2. I took deductions last year for inter-hospital travel. Did it using a gross estimate. Legitimizing it this year with a mileage log, can be obtained at Office Depot or Staples. It’s a spiral bound book, can’t really forward it. I would definitely encourage people to keep track, saved me a couple thousand in tax liability last year.
3. In terms of how to do it…beyond keeping a log. Most of the online tax software will walk you through it. It’s based off how many miles you drove overall, for work, and then in addition to your daily commute for work. I’m sure there’s a tax form it’s filling out but online you just enter your car info and the various miles you drove and I believe it basically gives you a deduction based on the government mileage rate. You just have to keep in mind that there’s no deduction for your daily mileage, only the amount in addition to to and from 1 work location.
4. You don’t have to actually submit the log, just need to have one available if you get audited, in which case you’ll have plenty of time to ‘find’ a complete and accurate log if necessary.
Here are a list of helpful links to websites regarding the reimbursement.
