2010 IRS Mileage Rates

Last week the IRS published the rates for what the IRS will allow as reimbursement for using your personal vehicle for business. For this year (2009) it was 55 cents per mile. For 2010 the rate was changed to 50 cents per mile.

This optional rate per mile can be used in place of keeping track of actual expenses. When claiming the cents per mile the employee or business owner needs to keep a travel log which contain the place you traveled to and business purpose plus the number of miles which were actually driven.

If you have any questions please contact your tax consultant for further guidance.

Cancellation of Debt

Generally, if a debt for which you are personally liable is canceled or forgiven, you must include the canceled amount in your income. This is commonly referred to as COD income. COD income can be from credit cards, mortgages, consumer loans like cars, LOC, ect. You should receive a Form 1099-C in early 2010 showing the amount which was forgiven or canceled during 2009.

There are several exceptions, exclusions, or reclassification that may result in part or all of your COD income being nontaxable. Two examples of an exception would be Qualified Principal Residence Indebtedness or if you are insolvent. Before claiming any exceptions please consult your tax advisor.