2009 Mileage Deduction Rate Published By IRS
We are a nation that loves to drive. If you get behind the wheel for part of your business efforts, the good news is you can actually deduct the mileage that you incur. In fact, the IRS has just released the 2009 standard mileage deduction rate.
How does the business mileage deduction work? The IRS issues a rate for different types of miles incurred. You then keep a log of your miles throughout the year. At the end of the tax year, you total up your log of miles and multiply it by the mileage rate. Let’s look at an example.
I have one car. I use it for personal and business mileage. I keep a log of all my business miles throughout the year. I write down the mileage when I drive to a lunchtime business meeting. I do the same when I drive to a meeting at the offices of a client. At the end of the year, I total up my miles and find I drove 3,400 miles on business.
The IRS has issued a tax mileage deduction rate of 55 cents a mile for business miles in 2009. Importantly, this is for the 2009 tax year, which means I would not use this rate until I prepared my taxes in 2010. Regardless, the rate would be used to calculate my deduction by multiplying .55 x 3,400. This equals $1,870. Yes, I can claim a deduction of $1,870 which is going to make a huge difference on my bottom line tax liability for the year.
As you can imagine, the business mileage tax deduction is ripe for abuse. The IRS watches it closely. You should always keep a log of your mileage. If you drive a ton, you should keep a very detailed log because the IRS will undoubtedly question it at some point in time.