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2008 Business Mileage Deduction Established

Death and taxes are the two sure things in life. There isn't much you can do about death, but tax deductions are a powerful tool in limiting the pain of paying your taxes. This is particularly true for tax deductions that increase every year.

The most popular deduction that is modified is the mileage deduction. The mileage deduction is tied into a variety of statistics including car costs and gas rates. Since gas prices tend to go up each every year, so does the deduction.

Most people assume the mileage deduction can only be claimed for pavement crossed on a business purpose. While this is the most common deduction, there are actually two other facets you can also claim if you are eligible.

If you help out a charity and do any driving when doing so, you can claim a milegage deduction of those miles. You can also claim a mileage deduction for certain miles incurred during moves or medical situations.

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 business mileage you incur in the 2008 fiscal year, you can deduct 50.5 cents per mile. If you drive 100 miles on business in a week, for example, you can claim a deduction of $50.50. Of course, you want to keep a running total for the year.

The rates applicable to the other mileage deductions in 2008 are less positive. The charitable mileage rate is unchanged and remains at 19 cents. The moving and medical expense rate actually drops from 20 cents in 2007 to 19 in 2008.

Every deduction is a good deduction and that clich certainly applies to mileage deductions. If you claim the deduction, make sure you keep records of your mileage in a mileage book. If you are audited, the IRS will want to see it.

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Aazdak Alisimo writes about taxes for BusinessTaxRecovery.com.

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