Sunday, December 28, 2008

The IRS on 2009 Mileage Rates

Here's the latest on IRS Mileage Rates for all you "Road Warriors" out there...

IRS Announces 2009 Standard Mileage Rates

IR-2008-131, Nov. 24, 2008

WASHINGTON: The Internal Revenue Service today
issued the 2009 optional standard mileage rates used
to calculate the deductible costs of operating an
automobile for business, charitable, medical or
moving purposes.

Beginning on Jan. 1, 2009, the standard mileage
rates for the use of a car (also vans, pickups or
panel trucks) will be:

  • 55 cents per mile for business miles driven
  • <>24 cents per mile driven for medical or moving purposes
  • <>14 cents per mile driven in service of charitable organizations

The new rates for business, medical and moving
purposes are slightly lower than rates for the
second half of 2008 that were raised by a special
adjustment mid-year in response to a spike in
gasoline prices. The rate for charitable purposes
is set by law and is unchanged from 2008.

The business mileage rate was 50.5 cents in the first
half of 2008 and 58.5 cents in the second half.
The medical and moving rate was 19 cents in the
first half and 27 cents in the second half.

The mileage rates for 2009 reflect generally higher
transportation costs compared to a year ago,
but the rates also factor in the recent reversal of
rising gasoline prices. While gasoline is a significant
factor in the mileage rate, other fixed and variable
costs, such as depreciation, enter the calculation.

A taxpayer may not use the business standard mileage
rate for a vehicle after using any depreciation method
under the Modified Accelerated Cost Recovery System
(MACRS) or after claiming a Section 179 deduction for
that vehicle. In addition, the business standard mileage
rate cannot be used for any vehicle used for hire or
for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the
actual costs of using their vehicle rather than
using the standard mileage rates.

Revenue Procedure 2008-72 contains additional
information on these standard mileage rates.

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