The IRS Increases Business, Moving and Medical Expense Mileage Rates

I may faint.

The IRS actually saw a need to provide some tax relief and it didn’t take an act of Congress to implement it.

Starting July 1st, the IRS is increasing the the allowable business deductible for business vehicles from 50.5 to 58.5 cents per mile.  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 IRS is also going to raise the rate for calculating computing deductible medical or moving expenses from 19 cents to 27 cents a mile, also starting July 1st. The rate for charity services, requiring an act of law to change it, remains at 14 cents per mile.  Hey, nobody’s perfect.

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

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

For more information read the IRS press realease.

As always, please remember that I am not an expert on finance, or an accountant. I’m just an accountant’s daughter. So, please, please, please contact your accountant for expert advice.

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3 Responses to “The IRS Increases Business, Moving and Medical Expense Mileage Rates”

  1. taxguru Says:

    There is an exciting business tool provided by http://www.MileageLogger.com that will help you capture your business mileage automatically, no need for pen and paper.

    BeThisWay’s Note: This is kind of a spam comment, but the tool does look like it would be very useful so I’m allowing it.

  2. Jon Moss Says:

    sure hope they amend the amount for charities too!

  3. Business Tax Guru Says:

    I’ve been included in taxes for lengthier then I care to acknowledge, both on the personal side (all my employed life story!!) and from a legal stand since passing the bar and following tax law. I’ve offered a lot of advice and redressed a lot of wrongs, and I must say that what you’ve posted makes perfect sense. Please persist in the good work – the more people know the better they’ll be outfitted to cope with the tax man, and that’s what it’s all about.


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