Volume 4 Issue 2008

The business standard mileage rate for 2008 is 50.5¢ per mile, a modest 2¢ higher than the 2007 rate of 48.5¢ per mile. Given the price of gasoline, you may wonder whether deducting your actual business-related driving expenses would be more advantageous.

The answer: It depends. Factors that make a difference include:

• The vehicle’s gas mileage

• Its cost and age

• How much you spend on repairs, maintenance, and insurance

• The number of business and personal miles driven

The standard mileage rate covers not just gas, but also other expenses of operating a car. So, for cars that are relatively inexpensive to operate, using the standard mileage rate often produces a larger deduction. However, because so many factors are at play, consider keeping the receipts and records that will be needed to calculate the deduction both ways.