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December 3, 2009

IRS Announces Standard Business Mileage Rate for 2010

Rates slightly drop as transportation costs ease.


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The Internal Revenue Service today 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 Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

* 50 cents per mile for business miles driven;
* 16.5 cents per mile driven 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 for 2010 reflect generally lower transportation costs compared to a year ago.

The standard mileage rate for business is based on an 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.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2009-54 contains additional details regarding the standard mileage rates. Order Richard Hammar's 2010 Church & Clergy Tax Guide for detailed information about handling vehicle expenses related to ministry work.

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Posted by Matt Branaugh on December 3, 2009 4:36 PM

Related Tags: Budget, church budgets, finance, IRS, Richard Hammar, tax

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