The sole proprietorship is taxed at the individual tax level. Basically, the income earned during the calendar year is calculated on Schedule C of Form 1040. The final number is transferred to the front page of Form 1040 to line 12. Schedule C is divided into three major sections.
Mileage Deduction Rate
The IRS sets the rate for mileage deduction at 56.5 cents per mile for calendar year 2013. This is a one cent increase over 2012. The mileage deduction rate changes from year to year. The rate is a function of various automobile operational costs including fuel, repairs and maintenance, insurance, taxes, licensing and original asset purchase allocation via depreciation.