Many taxpayers have a ‘side business’ in addition to their main source of income from a job or self-employment. In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business or for the production of income. However, Internal Revenue Code Section 183 (Activities Not Engaged in for Profit) limits deductions that can be claimed when an activity is not engaged in for profit. IRC 183 is sometimes referred to as the “hobby loss rule.”
January 1st not only welcomed in the new year, but also allowed you to start using the updated 2014 mileage rates for the deductible use of your vehicle.
The standard mileage rates for the use of a car (also vans, pickups or panel trucks) are now:
- 56 cents per mile for business miles driven
- 23.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations