Follows Federal Rates

• As of May 2011, Michigan's mileage rate follows the federal rate. Thus, if the Internal Revenue Service sets the federal mileage rate each year; if it raises or lowers its rates, Michigan does so as well. As of 2011, the IRS allows taxpayers to deduct 51 cents per mile of business travel. Thus, Michigan tax payers will use this rate to claim mileage on their state taxes, as well as on their federal tax return.
  
  

Qualified Travel

• Tax payers can deduct mileage if they traveled for legitimate business purposes. Any driving a tax payer does in the course of his job counts as business mileage. However, taxpayers cannot deduct their daily commuting miles from home to the office. If a Michigan tax payer travels to a different office for training or other work-related purposes, he may deduct the miles on his federal and state taxes. In addition, employees who work from home may deduct their miles if they must travel to the office for work-related reasons.
  
  

Documentation

• If you travel for business purposes, keep a log of your miles. Write down your mileage when you start your car before a business trip and your mileage at the end of the trip. Next to the mileage, note the purpose of your trip. This log proves that you traveled the miles that you claimed as a deduction on your tax return and that you drove for business purposes. Keep your log for at least three years after you file your taxes in case the IRS or the Michigan Department of Revenue audits your return.
  
  

Other Business Deductions

• In addition to deducting your business mileage, you can also deduct the cost of any travel-related lodging and half the cost of food. In addition, if you work from home, you can deduct the portion of your rent or mortgage that you use as your home office. You must use this space only for business purposes; you cannot use it as a bedroom, study or family room during non-business hours. You may deduct lodging and meals from your Michigan taxes, as well as your federal taxes