The IRS allows taxpayers to deduct 55.5 cents per mile for business use of one’s personal vehicle. The deduction is not affected by how efficient your vehicle is, so I am really benefitting from my purchase of a Chevy Volt.
I have driven almost 19,000 business miles in 2012, so I will get to deduct about $10,500 on my federal tax return in April. About half those miles were driven in a Lexus hybrid, costing me $1,144 for gas. The rest of the miles were driven in my Volt, costing me only $145 for gas (and no oil changes). The electricity consumed by the Volt would have cost me another $235 if it weren’t generated by the solar panels on my home and office. Being able to deduct 55.5 cents/mile is a nice windfall, and a nice reward for buying the Volt!
As mentioned in a previous post, I'll also get to claim $13,500 in tax credits (half on my federal return, half on the state return) for buying this amazing car.
Here's another unexpected, though minor, windfall... Rita and I shop at King Soopers and, like other customers, get 10 cents off per gallon for each $100 we buy in groceries. With my Lexus hybrid, that reward rarely built up to 20 cents per gallon because of all the gas I was buying. Now that I'm buying only 8 gallons of gas once a month, Rita is getting 40, 50 and sometimes 60 cents off per gallon when she buys 20 gallons for her car!