The Internal Revenue Service, citing the drain that high gas prices are having on people's finances, said today it is raising the automobile...
WASHINGTON — The Internal Revenue Service, citing the drain that high gas prices are having on people’s finances, said today it is 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 vehicles will rise from 50.5 cents a mile to 58.5 cents, or 15.8 percent, for the final six months of 2008.
That rate also applies to those operating automobiles for charitable, medical or moving purposes.
“Rising gas prices are having a major impact on individual Americans,” said IRS Commissioner Doug Shulman. “Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile.”
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The IRS said it was also changing the rate for computing deductible medical or moving expenses from 19 cents to 27 cents a mile for the final six months of the year.
The IRS normally updates the mileage rates once a year in the fall for the next calendar year.
“This is welcome news for a lot of folks out there. There’s no question that the cost of operating a vehicle has risen exponentially due to the dramatic increase in gas prices,” said Sen. Norm Coleman, R-Minn.
Coleman last week sent a letter to Shulman and called him to urge that the rate be increased to better reflect rising transportation costs.
He said he talked to Coleman again Monday and “he said that these are certainly unusual times, these are volatile times, and it requires that we act nimbly and quickly.”
Associated Press reporter Fred Frommer contributed to this story.