At $625 deduction per 1,000 miles it adds up.
If you figure a Fed tax rate of 25% + SE Tax of 14.13% (15.3% X 92.35%), that’s about 40 cents on the dollar tax savings without state and local tax.
If state and local taxes are another 5% to 7% you are now at 45 to 47% marginal rate.
For single taxpayers, the24% rate kicks in at $89,076 of taxable income and the 32% rate applies to income $170,051 to $215,950
I always tried to educate my tax clients to understand their marginal rates. That is the tax savings for each dollar of business expense or the increase applied to each dollar of business income.
If you are in the blue states with high state tax rates (Approx 10% if you live in NYC. (6% state + 4 % city)..
California = 9.3% of the excess of $58,634 (single)
Here are the 10 states with the highest income tax rates:
New York (8.82%)
Hawaii (8.25%)
Idaho (7.40%)
Maine (7.15%)
South Carolina (7.00%)
Connecticut (6.99%)
Nebraska (6.84%)
(Some states such as California are not included due to the graduated tax rates even though California top rate is 13.3%)
Does NOT help those using their personal vehicles for work.