As each year changes, so do the deductions we can take every year as it relates to mileage with business, charitable, and medical mileage. I often find that people I meet don’t keep the best track of these records, and every dollar you save can help you increase your bottom line.
The Internal Revenue Service issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Beginning on January 1st of this year, the standard mileage rates for the use of a car (vans, pickups, or trucks) will be:
- 50 cents per mile for business miles driven
- 16.5 cents per mile for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
The new rates for business, medical and moving purposes are slightly lower than last year’s. The mileage rates reflect generally lower transportation costs compared to a year ago. The standard mileage rate for business is based on annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study. (Source www.irs.gov)
Most people miss out on these deductions by not simply deploying a system to track your mileage. Remember that you cannot deduct the miles for your regular commute to and from work or if your employer reimburses you for those business miles. However, for those employees whose employer does not reimburse them for business travel, this can represent a great deduction. If you own a small business, you should absolutely sit down with your accountant or your financial advisor to figure out what methodology for automobile expenses or mileage would be the best deduction for you. The key is planning this out early in the year, and then having a tracking or log system for the mileage.
I hardly ever see people log their miles for charitable work. Most people seem to be unaware that this mileage deduction exists, yet they are giving time each year to help out from a charitable perspective.
I recommend that you get a tracking system early, and figure out in your own situation what kind of deductions you can potentially take here in 2010.
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