Tax Refunds & Advice

Starting on July 1, 2008, the standard mileage rate for business related driving is set to increase to 58.5 cents per mile. This is much more than the current rate of 50.5 cents per mile. Why is the IRS making such a big change this time around? Simply put, they are doing their best to keep up with the ever increasing cost of fuel. Although they have raised the standard mileage rate by 8 cents, most experts agree that the IRS is still far behind where they should be. After all, gas has topped $4/gallon in most parts of the United States and there is no reason to believe that this will be reversed anytime in the near future.

Why is the standard mileage rate important? Well, this is what businesses use to reimburse employees who drive for work related purposes. To go along with this, self-employed professionals also use this rate when driving for anything that has to do with their job.

If you currently take advantage of the standard mileage rate or will be in the near future, it is important that you keep this rate increase in mind. Those who work for a company will not have to worry about this because their employer should make this change come July 1. But if you work for yourself, this is something to keep in mind if you will be filing your own tax return.

Remember, you need to keep accurate records so that you can get what is coming to you without lying on your tax return. Anytime that you are driving for business, record both your beginning and ending odometer reading.

All in all, an increase in the standard mileage rate deduction was a long time coming. Fortunately, the IRS did the right thing and made this change effective July 1, 2008.