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July 20, 2008 Topic: Tax The Internal Revenue Service has announced an increase in the optional standard mileage rates. 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 cents from the 50.5 cent rate in effect for the first six months of 2008, as provided in Rev. Proc. 2007-70. Although the IRS normally only updates the mileage rates once a year in the fall for the next calendar year, it implemented this increase in recognition of the increased fuel prices that Taxpayers are currently facing. The optional business standard mileage rate can be used to compute the deductible costs of operating an automobile for business use instead of keeping track of actual costs. The rate is also used by many government agencies and businesses to set the mileage reimbursement amounts for their employees. Taxpayers may instead calculate the actual costs of using their vehicle rather than using the standard mileage rates. The new rates are contained in Announcement 2008-63. |
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