Increase in Standard Mileage Rates

October 16th, 2008

The Internal Revenue Service announced an increase in the optional standard mileage rates for the final six months of 2008. You have the option to use these optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes, versus keeping track of your actual expenses.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

“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,” said IRS Commissioner Doug Shulman. “We want the reimbursement rate to be fair to taxpayers.”

The new six-month standard mileage rate for deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, an increase from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations remains at 14 cents a mile.

Mileage Rate Changes

Purpose

Rates 1/1 through 6/30/08

Rates 7/1 through 12/31/08

Business

50.5

58.5

Medical/Moving

19

27

Charitable

14

14

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