Free Gas With the New Irs Mileage Deduction!

Author: Christy Pinheiro, EA

If you are self-employed, you can use the IRS Mileage deduction to essentially get your gas for free. The deduction for mileage is such a great one, too-- it is as if the IRS is giving away free gas to those who keep good records. Case in point:

If your vehicle gets 18MPG, then the 2008 IRS standard mileage deduction of 50.5 cents/mile will give you $9 in tax deductions for every gallon of gas you buy! (Just multiply 18 miles/gallon times 0.505 dollars/mile!) This means that at even the lowest combined Federal and State tax the IRS is paying for your gas! All you need for this free gas is an IRS conforming mileage log! MileageWiz Website

And the deduction just went up! The Internal Revenue Service today issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

55 cents per mile for business miles driven

24 cents per mile driven for medical or moving purposes

14 cents per mile driven in service of charitable organizations

The new rates for business, medical and moving purposes are slightly lower than rates for the second half of 2008 that were raised by a special adjustment mid-year in response to a spike in gasoline prices. The rate for charitable purposes is set by law and is unchanged from 2008.

The business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half. The medical and moving rate was 19 cents in the first half and 27 cents in the second half.

Article Source: http://www.articlesbase.com/taxes-articles/free-gas-with-the-new-irs-mileage-deduction-658712.html

About the Author:

Christy Pinheiro is an Enrolled Agent and holds a Bachelor’s degree from San Jose State University. She was a staff accountant for a private CPA firm and also for the State of California before going into private practice. She is a Member of the National Association of Tax Professionals and the Association of Certified Fraud Examiners. Her finance and tax articles have been published in numerous periodicals. She is the author of Pineapple Guides’ IRS Enrolled Agent Exam Review book series. Christy has an active tax practice in Sacramento CA, where She lives with her husband and two children. See her website at http://www.ChristyPinheiro.com and subscribe to her tax blog, http://thetaxblog.blogspot.com/ or her UFC Fan Blog at http://malebodybuilding.blogspot.com/ at Blogspot.