We can use IRS mileage rate to deduct the operating cost associated with running car for business or for moving purposes as well as for medical use.

The IRS mileage rates for using a vehicle were increased to help offset the rising cost of fuel during 2008, but as of January 1, 2009 have now been amended.

The current IRS mileage rates are as follows:

* Fifty cents per mile for business miles

* Twenty-four cents for mile for moving or any medical reasons

* In the service of any charitable organizations: 14 cents per mile.

Always keep in mind that these rates are subject to change, so before you add these figures to your tax estimates, double check what the current rate is so you can be sure you are deducting the correct amounts from your taxable income.

Actual Cost Calculation vs. Per Mile Calculation

Everyone may find that claiming standard IRS mileage rates for their car use may not be as much as they could claim by keeping the correct record for the actual cost incurred. And that is depending on the total use of vehicle.

This means counting the real costs incurred for things like lease payments, registration, depreciation, insurance, fees, gasoline, oil, tires, personal property taxes, maintenance, and services, or any repairs.

You can also then calculate whether the actual operational costs of your vehicle will generate a larger tax deduction than using the standard IRS mileage rates instead.

You most likely will be asked to verify which part of overall usage for medical, moving purposes, or business use, and which part was for family or personal use.

When Can’t You Apply the Regular IRS Mileage Rates?

Tax payers may not use the regular IRS mileage rates for their car if they have already made use of any other means of depreciation or claimed another deduction for the same car.

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