Friday, July 11, 2008

IRS pumps up standard mileage rates

Due to rising gas prices, the IRS has increased the
"standard mileage rate" for business drivers in 2008.

The standard mileage rate is an IRS-approved shortcut.
Instead of tracking all the actual business expenses of
your vehicle, you can use the prescribed flat rate for
the year. But you still must keep detailed records of
every business trip. Gas Pump

The new rate of 58.5¢ per business mile - up 8¢ per
mile - applies to travel during the last half of this
year. For the first half, the previous rate of 50.5¢ per
mile still applies. In addition, you may deduct any
business-related parking fees and tolls.

EXAMPLE: You drive 1,000 business miles a month in 2008.
Over the course of the year, you incur $500 in related
tolls. For the first six months, you can deduct $3,030
(50.5¢ x 6,000). For the last six months, the deduction
increases to $3,510 (58.5¢ x 6,000). When you add $500
in tolls, your deduction for 2008 equals $7,040 ($3,030
+ $3,510 + $500).

Note that the IRS also increased its standard mileage
rate for medical and job-related moving expenses from
19¢ a mile to 27¢ a mile for the last six months of this
year. However, the rate for charitable driving, which is
set by law, remains at 14¢ per mile.

Proceed carefully: The new mileage rates are available
to many - but not all - drivers. Give us a call if you
need details on how the changes affect your situation.

About Porter & Company, CPA's

The staff of Porter & Company have been practicing in the Dallas/Fort Worth metroplex for over 30 years. We are focused on meeting the demands of small to medium sized businesses as well as the individuals behind the business. We have an extensive practice area of tax and business solutions to bring cost effective results to you and your company.