IRS Sets Mileage Deduction Rate For 2008
Aazdak Alisimo
The almighty tax deduction holds a special place in the heart of every taxpayer. After all, how else can you reduce the amount of tax you owe? Well, some of these deductions change each year, which means you need to stay on top of them.
Of all the deductions that go up and down each year in value, the one you can claim for mileage is the biggie. It is based on a variety of factors including gas prices projected for the year. With oil near $100 a barrel, the deduction is up.
The mileage deduction is actually three in one. If you incur mileage in your car for a business purpose, you can get a deduction. Most people know about this deduction, but there are two other facets.
The first is mileage for medical or moving purposes. The second is for miles driven in service to a charitable organization registered with the IRS. There are tests for both deductions, so make sure you read up on them.
The exact cents per mile you can deduct for each of these is recalibrated each year by the IRS. The agency has just kicked out the figures for the 2008 year and the business mileage rate has gone up yet again.
For the first time ever, the rate for calculating the business mileage deduction has topped 50 cents. It is now 50.5. If you drive 1,000 miles on business in 2008, you can claim a deduction of $505, which isn't to bad at all.
You would think the moving, medical and charitable rates would also increase. Alas, this is tax where common sense is only a rumor. For 2008, the charitable rate is the same at 14 cents and moving and medical actually drops to 19 cents a mile.
Since we are talking about taxes, nothing could be so simple as the above. There are relatively easy tests that have to be passed before you can claim each deduction above. Make absolutely sure you comply with them.
Aazdak Alisimo writes about http://www.businesstaxrecovery.com/ taxes for BusinessTaxRecovery.com. Click here for other http://www.uberarticles.com/?id=26413&b=79 unique 'irs' articles.
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