IRS ALLOWS TAXPAYERS BIGGER MILEAGE DEDUCTION FOR SECOND HALF OF 2008

In recognition of the drastic increase in the cost of operating an automobile,  the Internal Revenue Service announced on June 23, 2008, that it was increasing the optional standard mileage rate it would allow for business use of a taxpayer's automobile by 8 cents a mile.  Any taxpayer using the business standard rate to calculate the deductible cost of using one's automobile for business will use 50.5 cents per mile for the first six months of 2008 and 58.5 cents for the second six months of 2008.

The IRS similarly will increase the allowance for medical or qualified moving expense use of one's automobile an additional 8 cents per mile from 19 cents per mile for the first six months to 27 cents per mile for the second six months.  There will be no change for the mileage allowance for the use of one's automobile for charitable purposes, as this figure is set by statute and not by the IRS.

A chart reflecting the IRS announcement is reproduced below:

                                Mileage Rate Changes

Purpose                  1/1/08 -  6/30/08         7/1/08 - 12/31/08
Business                          50.5                                       58.5       
Medical/Moving               19                                           27         
Charitable                         14                                            14        

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Tags: IRS, taxes, mileage allowance, 2008 taxes