IRS Increases Mileage Rates through December 31, 2008

The Internal Revenue Service has announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

"Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said IRS Commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers."

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The new rates are contained in Announcement 2008-63 on the optional standard mileage rates.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes

Purpose	Rates 1/1 through 6/30/08	Rates 7/1 through 12/31/08
Business	50.5	58.5
Medical/Moving	19	27
Charitable	14	14

Comments

[mileageblogger]

www.MileageLogger.com is providing an exciting new business tool for helping business owners deduct 58.5 cents for every mile. It's a revolutionary device that logs business miles automatically (hands free) and sends the trip records to an online account. IRS requires the records to be contemporaneous and since the device records the mileage as it happens you will have no fear of audits.

[C. C. Tompkins]

I at present work part time for a merchandising/sales oriented company, but they refuse to pay more than 28 cents a mile for driving my personal vehicle to & from the job site. Is there a law that will force them to pay up for me as well as the other workers? I don't want to get into a shoutomg match with them & do enjoy the working times but don't see that I should drive my vehicle for vertually nothing! And yes I could just quit, but how about all the mileage I feel they owe me?! If this should go forward somehow I would like to know about it. Thanks f& regards for any help.