IRS Mileage Rate Tax Deduction for 2010, 2011

The new standard mileage rates are released for 2010 and surprisingly, they are a little lower than last year’s rates. Taxpayers do have the option to calculate the actual costs of operating their vehicles instead of using the standard mileage rate deduction.

The standard mileage rates are slightly lower this year due to lower transportation costs connected to the drop in gasoline prices along with other variables that affect the standard mileage rate.
 
The Mileage Rates for 2010 are;

 50 cents per business mile
16.5 cents per mile for moving or medical purposes
14 cents per mile if driving in service for a charitable organization

The Mileage Rates for 2009 are;

55 cents per business mile
24 cents per mile for moving or medical purposes
14 cents per mile if driving in service for a charitable organization

Business and Charitable Rate Adjustments

The new rates for business, moving and medical purposes can be adjusted from year to year. This adjustment typically depends on what’s going on in the economy and gasoline prices. The rate for charitable purposes is set by law which has different considerations for change.

The Formula for Determining Standard Mileage Tax Rate

An annual study for business mileage rates, of the fixed and variable costs of operating a vehicle is conducted to determine the standard mileage tax rate for the year. Runzheimer International conducts the study as an independent contractor.

For More Information

As always, there are a few stipulations to consider when claiming the standard mileage deduction. The business standard mileage rate cannot be used for any vehicle used for hire or more than four vehicles used at the same time.
The price of gasoline is a significant factor in determining the mileage rate but, there are other considerations, for example; other fixed and variable costs, such as depreciation.

As I have already mentioned, you have the option to calculate the actual costs of operating a vehicle. For a more detailed explanation of the IRS mileage tax rate deduction you can refer to Revenue Procedure 2009-54 through the IRS web site. I suggest you visit TurboTax Online to calculate your mileage rate tax deduction. You will find their tax calculator to be very helpful and easy to use. Visit TurboTax Online today to discover the many benefits waiting for you!