The IRS Mileage Rate can be used to operate a vehicle or car for medical use or moving purposes, even for business use. Since January 2009, the IRS mileage rate can be used to determine how much you should be allowed to claim a deductible expense.

The IRS mileage rate could prove very convenient for lots of people since the cost of fuel slowly creeping up again, and for this, many people make the most of claiming for deductible expenses for cars use.

Remember that there are two ways to calculate deductible vehicle costs when you are calculating your own deductible expenses as well as factoring in the IRS mileage rate throughout the tax year.

For the vast majority of people using the IRS Mileage rate can help to reduce your tax liability. It increases the amount you are potentially likely to claim in deductions.

However another option for many business people is to calculate the real expense of the operating a car all the way through the year, which means keeping an accurate log book to record all miles driven.

That also means keeping all your receipts for servicing, fuel and maintenance costs, as well as registration and insurance costs should be included, together with any other routine maintenance or repairs that may come up all the way through the year.

Noting so many expenses throughout the year can be a bit troublesome on the paperwork side of things, and a lot of people prefer to only apply the calculation for the IRS mileage rate.

On the other hand, if you are willing to put up with a bit burdensome of keeping receipts as well as calculating the real costs, you might find that your deductions out weight the total amount handed automatically by the IRS Mileage rate.

The best way to find out whether you must use the IRS mileage rate or the real costs basis is to talk to your accountant.