When to use "If I was" vs. "If I were"?

When in doubt, always use the subjunctive mood:

If I were you...

It will make you sound smarter and it is technically correct since "the subjunctive mood is used to express a wish or possible situation that is currently not true."

It's if I were for hypothetical in the present or future and if I was when talking about something presumed true in the PAST. "IF" then means something likened to "since".

If I were class president, I would represent our class very well for the next four years.

If I was at the party last night, I don't remember.

It's an old, residual rule from the days of yore when English verbs conjugated differently for person and singular/plural in both the past and present tense indicative and subjunctive. While I may not have enough knowledge on Old and Middle English, I can show you the conjugation for to do for the 2nd person singular form of "thou" in Early Modern English:

present indicative - thou dost
present subjunctive - thou do
past indicative - thou didst
past subjunctive - thou did

It's why it should be "if I be" for things possible and one could still say it. We see "if truth be told" and "whether it be" and others, all residual subjunctives from the days of Chaucer and even Shakespeare wherein it was already disappearing. In Modern English, the past tense is uniform for every person (I, you, he, we, you, they did) except for "to be" (I, he was, but you, we, you, they were), but it wasn't always that way.

Anyway, if I were you, I would learn it because it usually separates the intelligent from ignoramuses. It's correct English even if it be a little old.

Well, "if I was" can be valid for the past, I guess.

If I was wrong, please forgive me.

That aside, I think one of the other answers is right that in British English — at least spoken — both are acceptable and probably equally common. (The 'were' version sounds more 'educated'.)

The rule that I was taught is that was is for things that could be true but aren't, and were is for things that could never be true.

So, if I was an airline pilot is OK because conceivably I could retrain as a pilot, if I wanted.

But if I were you is right because I will never be you.

The rule you were taught is wrong, Daniel.

The few subjunctive forms that are left can all be stated in other fashions using language that isn't subjunctive in form. We use lexical verbs to state subjunctive/contrary to fact situations all the time.

If I lived in Bangkok, ... // If I had a million dollars, ... // If I hadn't been born, ... .

Just as we can use the past time FORM of lexical verbs to describe contrary to fact situations, so too we can use 'was'. It's not as formal as the subjunctive form 'were' but it means the same thing.

There's not a speaker of English anywhere who thinks that "If I was you" means that the speaker is saying "I am you".

"If I were you" means the same thing as "If I was you". They both entail that I am not you.

Of course, we can and do use 'was' to state "allowing that that's true":

If she was at the party, she sure was quiet.