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IRS Lowers Standard Mileage Rates for 2010

In what is sure to be bad news for many drivers, the Internal Revenue Service is lowering most of its standard mileage rates for the coming year.

Currently, drivers enjoy a standard mileage rate of 55 cents per mile. For every mile driven for business purposes, individual taxpayers can deduct 55 cents from their taxable income. If you used your car to get medical care, or if you moved in 2009, you can deduct 24 cents per mile.

However, for all miles driven starting January 1, 2010, drivers will be able to deduct only 50 cents per mile, a 9.1% reduction over 2009 rates. In addition, the deduction for medical or moving purposes will plummet to 16.5 cents per mile, a 31% decrease over the 2009 rates.

Back in 2008, when energy prices were soaring skyward, the IRS made an emergency adjustment to account for the increasing costs of operating motor vehicles. These emergency adjustments not only impacted mileage rates for the latter half of 2008, but for all of 2009, as well.

But now that the energy crisis has eased considerably, and the cost of operating the motor vehicle has gone down, the IRS is adjusting those mileage rates downward.

There is one bright spot with the IRS announcement: miles driven for charitable purposes will remain unchanged at 14 cents per mile.

However, individual taxpayers who have come to rely upon those mileage deductions as part of their business or employment could be surprised when they see their tax bill a little higher at the end of 2010.

For all things releated to taxes, including 2009 tax law changes, check back to for the latest news and updates.




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