Mileage Rates from IRS for 2008

Deductible Costs of Operating an Automobile

Internal Revenue Service

The Internal Revenue Service has issued the 2008 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving expenses.

From January 1 through December 31, 2008, the standard mileage rate for tax purposes for use of a car (including vans, pickups or panel trucks) is as follows:

• 50.5 cents per mile for business miles driven
• 19 cents per mile for medical or moving purposes, and
• 14 cents per mile driven in service of charitable organizations.

The Internal Revenue Service noted the new rate for business miles compares to a rate of 48.5 cents for 2007. For medical and moving purposes, the new rate compares to 20 cents for 2007. The rate for miles driven in service of charitable organizations remains the same.

For business use, the standard mileage rate is based on an annual study of the fixed and variable costs of operating an automobile. The standard rate for medical and moving purposes is based on the variable costs determined by the same study. The mileage rate for charities is set by law.

A taxpayer may not use the standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming Section 179 deduction for that vehicle, for any vehicle for hire, or more than four vehicles used simultaneously.

For more information, refer to the “Revenue Procedure 2007-70” issued by the Internal Revenue Service.

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