IRS Releases 2008 Standard Mileage Rates
The IRS has released the 2008 optional standard mileage rates to be used by
employees, self-employed individuals and other taxpayers to compute
deductible costs of operating an automobile (including vans, pickups and
panel trucks) for business, medical, moving and charitable purposes.
Business Mileage Rate
The standard mileage rate for business mileage will be 50.5 cents per mile, an increase of two cents over the 2007 rate. When the standard business mileage rate of 50.5 cents is used for automobiles owned by the taxpayer, depreciation will be considered to have been allowed at a rate of 21 cents per mile. Such depreciation reduces the taxpayer's basis in the automobile.
The standard business mileage rate may not be
used for automobiles used for hire (i.e., taxicabs) or when five or more
automobiles are owned or leased and used simultaneously by the taxpayer
(i.e., fleet operations). Rules providing for substantiation of an
employee's ordinary and necessary expenses for local travel or
transportation away from home are also provided. Such expenses will be
deemed substantiated when the employer, its agent or a third-party provider
provides a mileage allowance under a reimbursement or other expense
allowance arrangement.
Medical and Moving Mileage Rate
The standard mileage rate for medical and moving expenses has been decreased
to 19 cents per mile from 20 cents per mile in 2007.
Charitable Mileage Rate
The standard mileage rate for charitable purposes remains at 14 cents per
mile.
Wherewithal
is provided by Somerset for our clients and other interested persons
upon request. Since technical information is presented in generalized
fashion, no final conclusion on these topics should be made without
further review. For additional information on the issues, please
contact
a member of the firm. Somerset provides total financial solutions,
including accounting, assurance, information solutions, litigation &
valuation, tax, wealth management and management consulting services to
entrepreneurs and their businesses. This document is not intended or
written to be used, and cannot be used, for the purpose of avoiding tax
penalties that may be imposed on the taxpayer.
Somerset CPAs,
P.C.
3925 River Crossing Parkway, Third Floor
Indianapolis, Indiana 46240
317.472.2200 • 800.469.7206 • FAX 317.208.1200
www.somersetcpas.com
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