IRS Mileage Rate Increased

The IRS Mileage Rate has been increased for the last 6 months of this year. IRS Commissioner, Doug Shulman, said that this reimbursement rate increase was in recognition of the increasing costs of operating a vehicle. With gasoline hovering around $4 a gallon this is welcome news for those who drive as part of their business or who wish to deduct the cost of moving, medical or charitable transportation costs and really need to save money on gas.

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The IRS Mileage Rate is usually increased only once a year. This increase from 50.5 cents a mile up to 58.5 cents a mile that can be applied to all deductible mileage from July 1, 2008 through December 31, 2008 will be a great help to many US taxpayers who run their own small business that requires transportation. The IRS Mileage Rate is usually only changed once a year in preparation for a new tax year. This early change will be welcome news by those being seriously impacted by rising gasoline prices on their small business operations.

Of course, this IRS Mileage Rate increase won’t have any impact on regular commuters since travel to and from a workplace isn’t deductible. Instead, these taxpayers should investigate various alternative fuel deductions that might help they get a tax break and save money on gas. This is the best way for the average taxpayer to take advantage of the IRS Mileage Rate.

 


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7 Comments »

Comment by taxguru
2008-06-26 19:47:06

There is a exciting new business tool provided by ___________ that logs business miles automatically, no more pen and paper.

Comment by jfc
2008-06-27 10:19:30

Hi Taxguru,

If you want to leave a comment to promote your product or get links, that’s fine. However, you must leave a meaningful, on-topic, comment that isn’t purely self-promotional. For examples, look at how Houseboat Rentals and Trade Show Booths are doing it.

 
 
2008-07-01 00:24:46

Frank, good info. I did not realize there had been a mid-year increase. That hasn’t happened in quite a while, has it! I cannot remember when the last time was that the rate was changed mid-year. Also, I remember once the mileage rate actually went down! That has been quite a while. I am happy to see this increase.

One thing I would like to see changed is the fact that I could not get any kind of tax break for buying a USED hybrid vehicle. Only the original owner receives one. I feel anyone using a hybrid, new or used, should get a tax break just for keeping the car on the road and not buying a gas guzzler!

 
Comment by Buy Business Note
2008-07-01 12:04:32

The IRS Mileage Rate should be adjusted monthly in my opinion. The IRS already squeezes enough out of taxpayers.

If high gas prices weren’t enough, people who recycle vegetable oil to use in their diesel vehicles are now being sought out to pay taxes on that fuel. So while alternative fuels may be cheaper and environmentally friendly the government wants more money from you.

THE + IRS = theirs

 
Comment by Buy Gothic Dresses
2008-07-02 04:34:43

I’m so pleased that my job doesn’t involve much driving. Since I work at home, I rarely have mileage to deduct. Of course, some of my driving is work-related, so a change in the IRS Mileage Rate has an effect … but not the same as it would for other business owners.

And I agree with the poster who suggested additional tax breaks for hybrid owners. The more of those vehicles that we have on the roads the better, since that way we’ll hit a critical mass quicker, thus bringing down prices.

Comment by jfc
2008-07-02 08:53:02

Hi Gothic,

It would probably help if hybrids, like the Prius, weren’t marketed based on ‘interminable smugness’ being a big selling point.

At best, I think that today’s hybrids are only intermediate step. At worse, a big waste of money on a ‘feel good’ proposition. I think that there are other alternative fuel methods that would be better in the long run.

 
 
Comment by Mike Taylor
2008-07-12 07:26:20

I do a ton of driving for my work and this is a very welcome relief. I agree hybrids are only a baby step, but at least it gets people thinking about alternatives.

 
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