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 |
