The Advantages of IRS Mileage
May 29, 2009 by Taxcut Editor
Filed under Personal and Business Taxes
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.
However this figure dros to twenty-four cents/mile driven for any moving purposes. You can request deduction of 14 cents/mile driven in the service of 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.
When you’re calculating your own deductible expenses and you’re factoring in the IRS mileage rate throughout the tax year, you should keep in mind that there are two ways to calculate deductible vehicle costs.
The primary is the IRS mileage rate which by far the easiest process. 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.
On the other hand, the alternative choice for many business people is to determine the real expenses of running a car thru the year. This means keeping an accurate log-book to record all miles driven. That is also means keeping your receipts for maintenance cost and fuel as well as servicing. Along with any routine maintenance or repairs that may arise thru the year, so that insurance costs and registration should be included.
Noting lots of costs throughout the year can be difficult on the paperwork side of things and then lots of people like to 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.
You may speak to your accountant whether you should take advantage of the IRS mileage rate or the actual cost basis or keep running cost of your total cost for 3 months and then multiply that amount by four so that you will get estimation of how much you can claim in a 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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