IRS Deduction for Use of Personal Vehicle for Businesss

WASHINGTON, July 8, 2008 - The 2008 reimbursement rate for the personal use of a vehicle for business reasons was announced back in January at 50.5 cents per mile by the IRS. A mid-year change to that policy went into effect on July 1st, but the Senate and Congress may have another change in the works.

The Internal Revenue Service, citing the drain that high gasoline prices are imposing on people's finances, said that it was raising the automobile mileage rate that businesses and others can claim.

The tax agency said the optional standard rate to calculate deductible operating costs for business vehicles will rise from 50.5 cents a mile to 58.5 cents for the final six months of 2008." Associated Press

That's good news for the many salespeople and other individuals in any industry driving personal cars for business. Even better might be the following.

The head of the National Treasury Employees Union (NTEU) described as timely and necessary legislation introduced today by Rep. John Lewis (D-Ga.) that would boost to 70 cents per mile the reimbursement rate for the personal use of a vehicle for business reasons.

The Lewis measure supports a call by NTEU President Colleen M. Kelley late last week in a letter to IRS Commissioner Douglas Shulman for a mid-year increase by the IRS in the reimbursement rate; it also mirrors pending Senate legislation which would boost the rate to 70 cents per mile."

Thinking Inside the Box

Everyone understands that record gas prices are taking a heavy toll on key segments of our economy. These prices are hitting particularly hard those people, in both the public and private sectors, who have to travel in their own vehicles to perform their work duties. The time for effective action by the federal government to provide some relief is right now.”