IRS Mileage Rate
In Credit Repair of CreditGuru (May 31, 2009 6:32 pm)
The IRS mileage rate as of January 2009 can be used to determine how much you should be allowed to claim as a deductible expense for operating a car or vehicle for business use, for medical use or for moving purposes.
Well, that means the IRS mileage for driving a car for business use is today calculated at 55 cents/mile driven.
Somehow, this amount drops to 24 cents/mile driven for any medical purposes. It’s okay for you to claim deduction of fourteen cents per mile driven from any charitable organizations.
Since the rate of fuel creeping up again, claiming for deductible expenses for car use means the IRS mileage rate could prove comfortable for lots of people.
You should keep in mind that there are 2 ways to count deductible car costs when you’re counting your very own deductible expenses and factoring in the IRS mileage rate throughout the tax year.
The primary is the IRS mileage rate which by far the easiest process. The sum of 55 cents per mile driven for business purpose was determined by basing estimates of the rate of running a car.
For the vast majority of people using the IRS mileage rate can help to reduce your tax liability and increase the amount you’re potentially likely to claim in deductions.
Somehow another option for many business people is to evaluate the actual expenses to operate a car the whole year. This means keeping an accurate log-book to record all miles driven. It also means keeping all your receipts for fuel or servicing and maintenance costs. Registration and insurance costs should also be included, along with any other routine maintenance or repairs that may arise through the year.
Recording so many costs throughout the year can be a little burdensome on the paperwork side of things and so many people prefer to simply use the calculation for the IRS mileage rate. You may find that your deductions outweight the amount handed automatically by the IRS mileage rate if you are willing to put up a little discomfort of keeping receipts that real costs.
The best way to determine whether you should use the IRS mileage rate or the actual cost basis is to either speak to your accountant or try to keep a running cost of your total expenses for a full three months and then multiply that figure by 4 to give you an estimate of how much you’ll be able to claim in an entire year. If you’re unsure of which way to proceed, call the IRS and they’ll be able to assist you with any questions.
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