Mileage Increase

With gas prices rising across the country, the IRS has decided to step in and and give businesses a little relief for the second half of the 2008 income tax filing year. Effective July 1, 2008, the Internal Revenue Service will change the standard mileage rate by increasing the optional standard mileage rate that taxpayers can use to calculate the deductible costs of operating an automobile. The rate will go up from 50.5 cents to 58.5 cents per mile for all business miles driven from July 1, 2008 through December 31, 2008. Rates have also increased for medical and moving expenses to 27 cents per mile. Charitable contributions mileage rates remain at 14 cents per mile. The IRS usually revises mileage rates once a year in the fall for the upcoming year, but high gas prices prompted the IRS to make a change for the last six months of 2008.