2010 IRS Mileage Rate of Vehicles Used for Home Based Business

The IRS has lowered the standard mileage rates for employees, the self employed, and other tax payers for use in calculating the deductible costs of their car. These rates reflects the slightly lower transportation costs compared to just a year ago. The 2010 IRS mileage rate is set at:

-- 50 cents per mile for business use
-- 14 cents per mile driven for charitable use
-- 16.5 cents per mile for medical and moving purposes

For the self employed who drive their own personal cars for business use, the standard mileage rate is a simple way of tracking your business related mileage. Instead of keeping all those receipts for gas and oil, tires, repairs, insurance, licensing, and everything else that's needed to keep a car rolling, the only thing you have to track is the actual mileage use and any parking fees or tolls incurred while driving on business,

To track your business miles, you can either purchase a "mileage log" or just buy a cheap 5 x 7 spiral notebook that fits neatly into the glove box. The information that must be recorded in the log includes:

-- Date
-- Location
-- Reason for the drive
-- Total mileage

Tolls and parking fees should be recorded in a separate column, and the receipts saved.

This is a simplified explanation of how to record your business miles in a way that makes sense at tax time. For more information about the business use of a car, read Topic 510 provided by the IRS or ask your accountant.

Other articles by this author:

Can I start a business in my garage?
5 small business training classes and workshops.
The pros and cons of leveraging your home for business cash.

sources:
http://www.irs.gov/taxpros/article/0,,id=156624,00.html
http://www.irs.gov/taxtopics/tc510.html
http://www.paddockcpa.com/index.php/articles/tax-legislation/64-standard-mileage-rates-for-2010.html