If you use your car for business, medical purposes, or when moving in 2010, you won’t be able to deduct as much as you could in 2009 using the Internal Revenue Service’s standard mileage rates.
The IRS this month announced that the standard mileage rate taxpayers can use when deducting business use of their vehicles will be 50 cents a mile, down from 55 cents for 2009. The rate for using a car for medical purposes or when moving will be 16.5 cents a mile, down from 24 cents. And the rate for charitable use of a car will remain unchanged at 14 cents.
In announcing the rates, the IRS said they “reflect generally lower transportation costs compared to a year ago.”
Rates for charitable use of a vehicle, unlike the others, are set by legislation. Rates for medical and moving-related car expenses are lower than business-related vehicle use because they don’t include certain expenses, including depreciation, lease payments, and insurance.
Instead of using the standard mileage rate to calculate your vehicle use deduction, you can use the actual cost. However, unlike with the standard rates, you must have records to substantiate the amount.—Anthony Giorgianni
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