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The Online Advisor

July 2008

New Business

 IRS raises mileage rates

With gas prices soaring, the IRS has responded to numerous requests to increase the standard mileage deduction for business driving.

For the final six months of 2008, the standard mileage rate for business driving has been raised to 58.5 cents per mile. The rate for business miles driven from January 1, 2008, through June 30, 2008, remains at 50.5 cents per mile. (The IRS also increased the deductible rate for medical and moving mileage for the last six months of 2008 to 27 cents a mile. For the first six months of 2008, the rate is 19 cents a mile.)

The IRS adjusts the standard mileage rates for business driving annually, but when driving costs rise dramatically during the year, the Service may consider a midyear change. Rates are based on annual fixed and variable costs of operating a car.

A study by the National Federation of Independent Businesses determined that the cost of energy is ranked as the second most troubling problem for small businesses this year.



Before you invest in any business, it's always a good idea to discuss the proposed venture with your advisors. If you would like assistance with evaluating a business opportunity or with legitimate tax planning, please call our office.

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