2008 mileage rate increase

[ecb34691]

IRS just announced mileage rate increases effective July 1. 58.5 cent/mile for business, 27 cents for medical and moving. Charity remains the same because it requires a law change.

[OtisMozzetti]

Use actual out-of-pocket charity cost instead

Yes, but, if the out-of-pocket cost for gasoline "and oil" exceeds 14 cents per mile, then deduct the actual out-of-pocket cost. Last week, the gasoline at the discount Costco gasoline station was $4.699 per gallon.

[DaveinTexas]

Another mid year change

IRS just announced mileage rate increases effective July 1. 58.5 cent/mile for business, 27 cents for medical and moving. Charity remains the same because it requires a law change.

So this means we have to "calculate", and I use that term loosely, the miles our clients drove from Jan to June and then from July to Dec. all over again. Where have I heard about this before...?

[zeros]

Before/After?

Why can't the IRS come up with a per mile figure that we can use from Jan thru Dec? Whatever happened to the tax simplicity?

[Jiggers]

Huh?

Why can't the IRS come up with a per mile figure that we can use from Jan thru Dec? Whatever happened to the tax simplicity?

The fuel prices have shot up considerably since the 50.5¢ was established last year for implementation in 2008.

Many businesses, including my own, has reimbursed business mileage using the IRS rate.

If the IRS established a blended rate for 2008, do we have to go back and reimburse employees the difference?

[AuditorTurnedGood]

Speaking of Cir 230

Anyone else a little edgy about all the SWAG's our clients use for mileage, among other things? If we ask them "what's your mileage" and they say "ummmmm, I don't know. Maybe 30,000?" two issues appear to present themselves. One, we know its a guess, or at best an estimate, which means if we take it on the return, are we taking a position we know does not have a more likely than not chance of surviving audit? Two, if the proceeding is true, could we get slapped with a preparer penalty? As for dividing the mileage number in half due to the change, you know that;s exactly what most our clients will want us to do. Take the "total business miles" and divide them by 2 as if they occured ratably over the year.

[Jiggers]

Mileage Records

Anyone else a little edgy about all the SWAG's our clients use for mileage, among other things? If we ask them "what's your mileage" and they say "ummmmm, I don't know. Maybe 30,000?" two issues appear to present themselves. One, we know its a guess, or at best an estimate, which means if we take it on the return, are we taking a position we know does not have a more likely than not chance of surviving audit? Two, if the proceeding is true, could we get slapped with a preparer penalty? As for dividing the mileage number in half due to the change, you know that;s exactly what most our clients will want us to do. Take the "total business miles" and divide them by 2 as if they occured ratably over the year.

That is why I have my clients sign a statement that shows the total miles for the year, business miles, and that they can substantiate the business use.

[JohnH]

I do what Jiggers does - have them sign a separate statement which also includes a place for them to check off the dreaded "Do you have written records?" questions. It's on an excel spreadsheet so it can be easily modified.

The last time we split mileage rates (was that 2005?), I modified the form so they could enter their mileage for each month and then we added up the separate sub-totals for the two rates.