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.

On the other hand, this amount drops to twenty-four cents/mile driven for any moving and medical purposes. You may claim deduction of 14 cents per 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 primary is the IRS mileage rate which by far the easiest technique. 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.

Somehow another choice for lots of business people is to reckon the real expenses of operating the car throut the year. This means keeping an accurate log-book to record all miles driven. It also means keeping all your receipts for fuel or servicing and maintenance costs. 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.