I just received an email Hot off the IRS Newswire related to a topic that we hear about every day now in the news, and on Everywhere Street, in Everywhere, USA – the soaring gas prices.
The IRS is recognizing the increases in the recent gasoline prices by increasing the optional standard mileage rate for the last six months of 2008. From July 1 through December 31, 2008 the standard mileage rate is increased by 8 cents per mile from 50.5 cents to 58.5 cents per mile for all business miles driven in the final six months of the year. Generally the IRS only updates the mileage rates once a year in the fall for the following calendar year.
The IRS Commissioner Doug Shulman said, “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. We want the reimbursement rate to be fair to taxpayers.”
The optional standard mileage rate calculation includes gas as well as depreciation and insurance and other fixed and variable costs of operating your vehicle for business and can be used in lieu of tracking actual expenses of operating your vehicle. This rate is also used by the federal government and businesses as a benchmark for reimbursements to their employees for business related mileage.
The deductible medical or moving expenses will also increase by 8 cents a mile for the last six months of the year up to 27 cents a mile from 19 cents a mile. And the rate for providing services for charities is not changed and will remain 14 cents a mile for the balance of 2008.
Now this doesn’t make our gas cost any less at the pumps, but it does help those who use there vehicles for business purposes and medical or moving purposes with increased tax deductions. Maybe someone, somewhere in power will follow the lead set by the IRS and do something about the overall problem of the rising gas prices. What do you think? There’s no harm in wishing and hoping now, is there?
The new rates are contained in Announcement 2008-63.
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