IRS Mileage At A Glance
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.
However this figure dros to twenty-four cents/mile driven for any moving purposes. You are allowed to obtain the deduction of 14 cents/mile driven in the service of any charity.
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 first is the IRS mileage rate and it’s by far the simplest method. 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.
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. It also means keeping your receips for fuel and servicing. Registration and insurance costs should also be included, along with any other routine maintenance or repairs that may arise through the year.
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.
Earned Income Tax Credit
Filed Under Earned Income Tax Credit |
Tagged With business tax, IRS, Tax, Tax Relief, tax return
Comments
Leave a Reply
Sponsors
Tags
accountant bookkeeping CPA Earned Income Earned Income Tax Earned Income Tax Credit Earned Income Tax Credit EITC EITC help with prescriptions income tax IRS Preferred Tax Advice Preferred Tax Help preferred tax relief prescription assistance prescription help raleigh rx help Tax Tax Advice taxes Tax Help tax preparation Tax Relief tax return