IRS Updates Standard Mileage Rates
In Revenue Procedure 2007-70, the Internal Revenue Service has provided an update of the standard mileage rates for employees, self-employed individuals, or other taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. The Procedure also provides rules under which the amount of ordinary and necessary expenses of local travel or transportation away from home that are paid or incurred by an employee are deemed substantiated if a payor (the employer, its agent, or a third party) provides a mileage allowance under a reimbursement or other expense allowance arrangement to pay for the expenses.
Effective Jan. 1, 2008, the standard mileage rates for businesses is 50.5 cents per mile. For charitable contributions it is 14 cents per mile, and for medical and moving it is 19 cents per mile.
Use of a method of substantiation described in the revenue procedure is not mandatory and a taxpayer may use actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation. The IRS prospectively adjusts the business and medical and moving standard mileage rates annually (to the extent warranted).