If you travel by car on business, you can deduct your mileage. The
IRS mileage reimbursement should always be claimed to save serious money
on your tax bill.
The IRS mileage reimbursement isn’t really a reimbursement at all. The IRS doesn’t send you a check for your money. Instead, you figure out the monetary equivalent for the mileage and claim it as a deduction on your tax return.
The IRS mileage reimbursement isn’t really a reimbursement at all. The IRS doesn’t send you a check for your money. Instead, you figure out the monetary equivalent for the mileage and claim it as a deduction on your tax return.
Typically, the IRS sets a particular rate you can
claim per mile for a particular year. For example, the IRS declared that
you could use 50 cents per mile to determine your deduction for 2010.
To determine the deduction, you would simply total your business mileage
for the year and multiply it by 50 cents. If you traveled 1,000 miles
on business, the deduction would be $500.
The mileage rate is determined based on a number of
factors. One of the big ones is the cost of fuel. The economic meltdown
of 2008 and 2009 saw demand for gas drop like a rock. When this
occurred, the cost at the pump was translated to the rates the IRS
issued. There is a one year lag on the rates, to wit, the low demand in
2008 is reflected in the 2009 rates and so on.
Regardless, the IRS Mileage Reimbursement rate has
been going down. It was 58 cents a mile in 2008. It then dropped to 55
cents for 2009 and is going to be 50 cents for 2010. It goes without
saying that these rates are applicable to the tax year, not when you
file the tax return. If you are trying to figure out your mileage
deduction for 2010, you would use the rate for that year even though you
are preparing the returns in 2011.
The IRS mileage reimbursement is on of those items
that help business people recoup a buck or two. Make sure to track your
business mileage, keep records and deduct all you are entitled to.