Notice: 2008 IRS Mileage Rate Increased
The IRS has announced a new mileage rate will be in effect for July to December 2008. Due to the unbearable increase in gas prices, the IRS is raising the standard business mileage rate from 50.5 cents to 58.5 cents per mile. All taxpayers that deduct their miles traveled for business will find the increase good news as gas prices are still through the roof.
In general, the IRS only updates the mileage rate once a year if needed but because of the current gas prices and impact on the economy, they have made a special adjustment to help taxpayers. The IRS has allowed business deductions for mileage to work in 2 ways. Either businesses can provide the car, gas, insurance, and all expenses. Or the other option is to simply reimburse the car use according to the standard mileage rate. Most small businesses elect to just reimburse gas mileage to simplify accounting and record keeping.