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Will the IRS be increasing mileage rates because of high gas prices?
Yes, indeed. The IRS usually adjusts mileage rates only once a year, but high gas prices prompted the government to raise the tax-deductible mileage rates in the middle of 2008.
Starting on July 1, when you use your car for business, you'll be able to write off 58.5 cents for each mile you drive, which is an 8-cent increase from the first half of the year. Many private companies use the same rates as the IRS and are likely to raise their reimbursement rates for travel expenses, too.
The rate for each mile driven for medical and moving purposes will also increase by eight cents, up to 27 cents a mile starting on July 1.
The rate for each mile driven to help a charitable organization, however, will remain at 14 cents. That rate is set by statute rather than by the IRS.
For more information about each type of mileage deduction, see the following IRS Tax Topics: Business Use of Car, Medical and Dental Expenses and Charitable Contributions. Also see the Kiplinger Tax Center.
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