Local News »IRS Increases Mileage Rates for Second Half of ‘08

IRS Increases Mileage Rates for Second Half of ‘08

By Victor Omelczenko | Posted on 07/02/2008

EMAIL PRINT FRIENDLY COMMENT

The federal government adjusts its standards in response to rising gas prices.

The Internal Revenue Service has announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase 8 cents to 58.5 cents a mile for all business miles driven from July 1 through Dec. 31.

In response to gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

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

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. The rate also is used as a benchmark by the federal government and many businesses to reimburse employees for mileage.

The new six-month rate for computing deductible medical or moving expenses also will increase 8 cents to 27 cents a mile. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The new rates are contained in Announcement 2008-63 on the optional standard mileage rates.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Victor Omelczenko represents the IRS Media Relations Office, Los Angeles.

Forest Service’s Gap Fire Report Raises Debris Alarms

Sonia Fernandez, Noozhawk Staff Writer

Police Say Body Found in Bushes is Missing Goleta Teen

Noozhawk Staff

Vandals Strike Again, Hurling Brick Through Art Gallery Window

Rob Kuznia, Noozhawk Staff Writer

Lynn Ralph Spear, 1938-2008

Sonia Fernandez, Noozhawk Staff Writer

Local Artists Left to Pick Up the Pieces After Vandals Strike

Rob Kuznia, Noozhawk Staff Writer

Santa Barbara Bank & Trust Celebrates 45-Year Employee

Brian Kerstiens

Santa Barbara Man Helps With Finer Points of Detailing Air Force One

Julia McHugh