Things You Should Know About IRS Mileage

By • Jul 21st, 2009 • Category: Tax

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.

Effectively this means that the IRS mileage rate for driving a vehicle for business purposes is now calculated at 55 cents per mile driven.

Somehow, this amount drops to 24 cents/mile driven for any medical purposes. You may claim deduction of 14 cents per mile driven in the service of any charity.

With the cost of fuel slowly creeping up again, making the most of claiming for deductible expenses for vehicle use means the IRS mileage rate could prove very convenient for many 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 method. The total of fifty-five cents per mile driven for business purpose was determined by basing estimates of the flat as well as various costs of running a vehicle.

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. It means keeping an exact log book to note the whole miles driven. It also means keeping your maintenance costs or fuel and servicing. Along with any routine maintenance or repairs that may arise thru the year, so that insurance costs and registration should be included.

Many people prefer to use the calculation for the IRS mileage rate since it can be burdensome on the paperwork side by recording so many costs throughout the year. 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.

A good way whether you must use the IRS mileage rate or the real cost basis is to either talk to your accountant or try to keep a running fee of your all expenses for 3 months and multiply that amount by 4 to give you an estimate of how much you will be able to claim thru the 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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