Wednesday, December 05, 2007

Good News for Us Contractor's Out There: Gas Standard Mileage Rate Increase

Yeah.. about time. It's not much, but it's something. You might (or not) find this useful. I know this would have saved me about  $600.00 on this year's taxes if it had happened in 07 instead of 2008.

Increase in Standard Mileage Rates

The Internal Revenue Service recently issued the 2008 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be: 50.5 cents per mile for business miles driven; 19 cents per mile driven for medical or moving purposes; and 14 cents per mile driven in service of charitable organizations.

The new rate for business miles compares to a rate of 48.5 cents per mile and the new rate for medical and moving purposes compares to 20 cents for 2007. The rate for miles driven in service of charitable organizations has remained the same. The standard mileage rate for business, including medical and moving purposes, is based on an annual study of the fixed and variable costs of operating an automobile. Runzheimer International, an independent contractor, conducted this study for the IRS.

The mileage rate for charitable miles is set by law. A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire or for more than four vehicles used simultaneously.
See: IRS Announces 2008 Standard Mileage Rates article

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