Standard mileage rate to be lowered in 2010

The 2010 standard mileage rates for business, medical and moving travel will decline.

Business travel will decrease 5 cents from last year to 50 cents per mile mainly due to lower fuel costs.  This allowance only applies to businesses with four or less vehicles and will required them to reduce the vehicles’ basis by the depreciation component.  Furthermore, employers will have to change their payroll systems to the new rate and issue reimbursements to workers that have over 50 cents per mile for 2010.  These reimbursements will be taxed as income and included with payroll taxes.  Medical travel and moving will be hit harder than business travel, declining 7.5 cents to 16.5 cents per mile.

Source www.irs.gov