Posted by PAW on 11/25/08 11:56am
Msg #270587

IRS Announces 2009 Standard Mileage Rates

WASHINGTON — The Internal Revenue Service today issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

55 cents per mile for business miles driven
24 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations
The new rates for business, medical and moving purposes are slightly lower than rates for the second half of 2008 that were raised by a special adjustment mid-year in response to a spike in gasoline prices. The rate for charitable purposes is set by law and is unchanged from 2008.

The business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half. The medical and moving rate was 19 cents in the first half and 27 cents in the second half.

The mileage rates for 2009 reflect generally higher transportation costs compared to a year ago, but the rates also factor in the recent reversal of rising gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, enter the calculation.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2008-72 contains additional information on these standard mileage rates.

Reply by Ilene C. Seidel on 11/25/08 12:23pm
Msg #270589

It's about time that 39 cents wasn't worth getting in my car.

Reply by WDMD on 11/25/08 1:18pm
Msg #270599

"It's about time that 39 cents wasn't worth getting in my car."

39 cents?

Reply by MW/VA on 11/25/08 1:01pm
Msg #270594

Thanks for sharing the info, Paul. I paid $1.62 for gas today--whooohooo! It's been a long time since it cost under $20 to gas up.

Reply by RickinVA on 11/25/08 4:51pm
Msg #270607

Thanks, Paw. BTW, a couple of years ago, when gas was around 1.20 or so,
AAA came out with a statement estimating the actual costs of owning and
driving a car was over a dollar a mile. This was supposed to take into account
insurance, depreciation, taxes and actual costs of oil changes, gasoline, etc.
So, using the IRS allowance is NOT the actual cost of driving. (I realize
you are not suggesting that it is.) So, if anyone is using the IRS allowance as gospel,
they will rapidly lose money.

Rick