2008 Mileage Deductions From the IRS

For your reading pleasure, here is the release from the IRS for the 2008 mileage deductions. If you haven’t been keeping a log of your mileage, shame on you, you better get started. Make sure you have the odometer miles, the starting miles, ending miles, destination, and purpose of the trip in your documentation in case you get audited.

IRS Increases Mileage Rates through Dec. 31, 2008

 

IR-2008-82, June 23, 2008

  WASHINGTON — The Internal Revenue Service today 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


Kim Greenblatt

Questions or comments? Let me know about them! Thanks for taking the time to visit and for more information or to get back to the beginning of the blog, go here.

You are reading about the 2008 mileage changes from the Internal Revenue Service.  Make sure you are keeping good financial records for your business driving!

Leave a Reply

*