| The IRS announced today that the standard mileage | | | | taxpayers forget more deductions then they keep. But |
| rates for the final six months of 2008 will increase to | | | | the car itself, keeps tracks of all miles and the day |
| 58.5 cents a mile for all business miles driven from July | | | | book tells you where you have been and records can |
| 1, 2008, through Dec. 31, 2008. | | | | be reconstructed immediately if you should forget to |
| This is an increase of eight (8) cents from the 50.5 | | | | record miles to and from business appointments. |
| cent rate in effect for the first six months of 2008, | | | | There are new devices out there that even make this |
| The IRS went on to say that the mileage adjustment | | | | task less painful and save you thousands of dollars in |
| was made because of Rising gas prices and while | | | | taxes. When you look at the amount of the mileage |
| gasoline is a significant factor in the mileage figure, | | | | deduction, you begin to understand that this is a large |
| other items enter into the calculation of mileage rates, | | | | deduction that should not be taken lightly. |
| such as depreciation and insurance and other fixed | | | | Say you travel 102 miles during a business day and |
| and variable costs. (Announcement 2008-63) | | | | you do this 2 times a week. Lets do the math. For the |
| The new six-month rate for computing deductible | | | | first half of the year you did 26 weeks of 2 x 102 |
| medical or moving expenses will also increase by eight | | | | miles = 5304 x 50.5 cents per mile = $2679 for the |
| (8) cents to 27 cents a mile, up from 19 cents for the | | | | first half of 2008. |
| first six months of 2008. The rate for providing | | | | For the second half of 2008 the amount of deductions |
| services for charitable organizations is set by statute, | | | | for the business miles would be: 5304 x 58.5 cents = |
| not the IRS, and remains at 14 cents a mile. | | | | $3103 for the same period of time. The total mileage |
| Taxpayers always have the option of calculating the | | | | deduction for business miles alone would be $5782.00 |
| actual costs of using their vehicle rather than using the | | | | Unless your employer reimbursed you for a portion of |
| standard mileage rates. | | | | these miles, you would have a tax write off of at |
| The actual cost often reflects the true and correct | | | | lease $5782.00 for business use of your auto. If you |
| expenses to operate the vehicle, but many taxpayers | | | | are self-employed this is a major deduction and more |
| use the standard mileage rate because of the | | | | then likely will be more because you are not tied to the |
| bookkeeping involved with actual cost. Taxpayers are | | | | rule of having to go to the job first and then departing |
| responsible to keep a accurate record of all fuel | | | | for business related destinations before your mileage |
| purchases, oil, and maintenance cost. Too often | | | | deduction kicks in. |