Effective July 1, 2008, the optional standard mileage rate has increased by 8 cents, from 50.5 cents per mile to 58.5 cents per mile, for all miles driven from July 1 to December 31, 2008.
The increase allows taxpayers to use the higher deduction amount as an alternative to recording actual costs of operating a qualifying vehicle. The new rate is also for determining the reimbursement amount to employees who operate an automobile for business purposes.
The Internal Revenue Service made this special adjustment for the final months of 2008 because of the recent gasoline price increases.
"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," said IRS Commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers."
The rate for moving and medical mileage also increased 8 cents, to 27 cents; the rate for charity services, however, remained at 14 cents because it is a special case and requires an act or law to change it.