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.
Health Care Commentaries is
provided by Somerset’s
Health Care Team
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 discussed, please contact a member
of our Health Care Team. 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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