Business Standard Mileage Rates for 2010
The IRS has set the optional 2010 standard mileage rate at 50¢ per mile for owned or leased autos (including vans, pickups, and panel trucks) for business travel. That's a 5¢ decline from the 55¢ rate that was in effect for 2009. The IRS says that the decline reflects the generally lower transportation costs compared to 2009.
The standard mileage rate is used to calculate the deduction for business use of a car. The deduction, which is calculated by multiplying the number of business miles driven by the appropriate rate, covers expenses related to the cost of owning a vehicle (e.g., depreciation) as well as operating costs such as maintenance, repairs, insurance, and gas. Parking fees and tolls connected to business driving, though, can still be claimed as separate deductions. Taxpayers can opt out of using the standard mileage rate and instead deduct their actual expenses.
The Standard Mileage Rate Has Advantages
The standard mileage rate offers taxpayers several advantages. For example, the taxpayer doesn't have to keep a record of actual expenses or save receipts. Instead, the only requirement is that the taxpayer maintains a record of the time, place, business purpose, and number of miles traveled. In addition, if auto expenses are deducted via the mileage rate, the auto is not subject to the tax code's depreciation dollar caps or the special rules that apply if qualified business use does not exceed 50% of total use.
Beginning January 1, 2010, the standard mileage rate for the use of an automobile in connection with a move that qualifies for the moving expense deduction is 16.5¢ a mile, 7.5¢ lower than the rate for 2009. The mileage rate for driving a car for charitable purposes remains unchanged for 2010 at 14¢ per mile. This rate is set by law and is not adjusted for inflation.
"The standard mileage rate is used to calculate the deduction for business use of a car."
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