The Internal Revenue Service will lower its standard-mileage-reimbursement rate on Jan. 1 to 55 cents a mile - 3.5 cents less than the current rate - in part because gasoline prices have declined, the IRS said in a news release.
The standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs.
The federal government and many businesses use the rate as a benchmark to reimburse their employees for mileage.
The standard mileage rates for cars, vans, pickups and panel trucks) will be:
The rate in effect for the first six months of 2008 was 50.5 cents per mile. The IRS made a special adjustment for the second half of 2008 to 58.5 cents a mile in response to the spike in gasoline prices.
While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, enter the calculation, the IRS said.
Employers who use the IRS standard mileage rate to reimburse employees may deduct the reimbursement as a business expense.
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