The Internal Revenue Service announced that the mileage deduction will increase from 50.5 to 58.5 cents beginning July 1, 2008. This increase is an adjustment to “better reflect the real cost of operating an automobile,” according to IRS Commissioner Doug Shulman.
The increase in mileage deduction will be a huge boost to self-employeed workers that endure a considerable amount of driving. The high price of gasoline has had a major affect on all consumers, and this increase in deductibility should help offset some of these higher costs.
The IRS also increased the mileage deductibility limits on moving expenses and medical travel. This rate is going from 19 to 27 cents per mile, which represents a substantial increase.
Unfortunately, volunteers will not get a break. The rate for providing transportation as a volunteer for a charity remains at 14 cents per mile. The IRS is unable to change this rate. Only Congress can enact a change in the charitable mileage rate.
Regardless, this adjustment is a welcome change for those who are struggling to cover high gasoline costs as a part of their job. By making the change now rather than for 2009, the IRS allows it to immediately impact those who have been most affected by high gasoline prices.
Tags: IRS mileage deduction