In response to increasing gas prices, the Internal Revenue Service recently announced that it is raising the standard mileage rate for the last six months of 2008. Beginning July 1st, the standard mileage rate for business use of a vehicle will be 58.5 cents per mile. For the first six months, the standard mileage rate was 50.5 cents. The standard mileage rate for medical purposes and for moving will increase 8 cents to 27 cents per mile and the charitable mileage rate will remain at 14 cents per mile.
The standard mileage rate is an optional method a taxpayer can use to determine the costs associated with operating a vehicle for business purposes. Additionally, an employer can use the standard mileage rate to reimburse employees for the business use of their personal vehicles. Use of the standard mileage rate is not mandatory and a taxpayer can choose to expense the actual costs of operating a vehicle for business if sufficient records are maintained. |