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.
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.
As the collection agency of the United States Treasury, the Internal Revenue Service sets the mileage rates for all the categories each and every year. It has kicked out figures for 2008 and there is some good news again.
Consider the fact that you are spending anywhere from $2 something to nearly $4 a galloon of gas. The IRS is going to let you write-off 50.5 cents for every mile you drive on business in 2008. That can really help offset those prices at the pump.
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.
Now for your disclaimer. There are tests that must be met before claiming the above deductions. Make sure you know them and can pass them. Also, keep a booklet of your mileage so the IRS has something to read if it asks for it.
