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.

Efficiently it means that the IRS rate for business use is now calculated at 55 cents/mile driven.

However this figure drops to 24 cents per mile driven for any medical or moving purposes. It’s okay for you to claim deduction of fourteen cents per mile driven from any charitable organizations.

Lots of people feel comfortable making the most of claiming for deductible expenses for vehicle use since the cost of fuel is creeping up again.

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 process. The total of fifty-five cents per mile driven for business purpose was determined by basing estimates of the flat as well as various costs of running a vehicle.

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. Registration and insurance costs should also be included, along with any other routine maintenance or repairs that may arise through the year.

Recording so many costs throughout the year can be a little burdensome on the paperwork side of things and so many people prefer to simply 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.