Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) is:
Business Mileage
50.5 cents per mile for business miles Jan 1 through June 30,2008
58.5 cents per mile for business miles July 1 through December 31,2008
Medical or Moving Mileage
19 cents per mile for business miles Jan 1 through June 30,2008
27 cents per mile for business miles July 1through December 31,2008
Charitable Mileage
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 for 2007 medical and moving purposes compares to 20 cents. The rate for miles driven in service of charitable organizations has remained the same.
The mileage rate for charitable miles is set by law.
Usually the IRS adjusts the mileage rate once per year, but in 2005 it raised the rate a whopping 8 cents at mid-year, the steepest one-time hike eve, because of the steep rise in gasoline prices created in part by Hurricane Katrina.
Fuel prices are again a factor in the IRS' decision to raise the rate, the tax agency said.
"The primary reasons for the higher rates were higher prices for vehicles and fuel during the year ending in October," the agency said in a press release.
The standard mileage deduction is limited to companies using four or fewer vehicles. For larger companies ineligible to take the deduction, the IRS standard mileage figure is widely used as a benchmark in setting reimbursement rates for employees' driving expenses.
To determine the mileage rate, the IRS hires an independent researcher, Runzheimer International, to analyze driving costs, including fuel prices, car maintenance and registration.
For miles driven for medical or moving purposes, the standard mileage rate will rise to 20 cents per mile in 2007, from 18 cents a mile in 2006.
The altruistic will find no added relief: The rate for driving related to charitable purposes, a rate set by Congress, remains at 14 cents a mile.
