One important business expense is the mileage deduction for your business vehicles. The Internal Revenue Service (IRS) sets a standard business mileage rate for calculating the mileage deduction for operating a vehicle for business purposes. For the first half of 2008, the standard business mileage rate is 50.5 cents per mile.
For the second half of 2008, the standard business mileage rate is 58.5 cents per mile. This increase, beginning July 1, 2008, was in response to the high gas prices in 2008.
The IRS Commissioner. Doug Shulman, said, "Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile. We want the reimbursement rate to be fair to taxpayers."
In order to calculate your mileage deduction, multiply the standard deduction by the number of miles driven for business purposes. Be sure and divide your mileage up into miles driven before and after July 1.
Remember that you must keep meticulous driving records. You can only claim mileage if you have kept a record of it.
