Economy

IRS lowers vehicle mileage deduction rate for 2010

Lower transportation costs prompted a 9 percent cut — to 50 cents a mile — for the 2010 mileage deduction rate authorized by the Internal Revenue Service.

The national average price for a gallon of unleaded gasoline was $2.63, or about 83 cents a gallon higher than last year.

The change in the mileage deduction rate reflected other factors, such as depreciation, lease payments and insurance, according to the IRS.

The deduction rate for 2009 has been 55 cents a mile.

The deduction rate applies to the use of personal vehicles for business when that cost is not reimbursed by the employer.

Other deduction rates set for 2010 are 16.5 cents a mile for personal vehicle use for medical purposes, down from 24 cents a mile this year, and 14 cents a mile, unchanged, for charitable use.

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