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The Internal Revenue Service announced an increase in the standard mileage rates for the final six months of 2008. The rate increases to 58.5 cents a mile for all business miles driven from July 1, 2008, through December 31, 2008. This is an increase of 8 cents from the 50.5 cent rate in effect for the first six months of 2008.
The 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 mileage reimbursement rate for computing deductible medical or moving expenses for the last six months of 2008 also increased by 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.
For tax purposes, you always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
| Purpose | Rates 1/1 - 6/30/08 | Rates 7/1 - 12/31/08 |
|---|---|---|
| Business | 50.5 cents | 58.5 cents |
| Medical/Moving | 19 cents | 27 cents |
| Charitable | 14 cents | 14 cents |
Posted: July 2008