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2009 IRS Mileage Rate |
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As of January 1, 2009, the Internal Revenue Service (IRS) decreased the standard mileage deduction for business use of a motor vehicle to 55 cents per mile. The deduction was increased to 58.5 cent per mile, effective July 1, 2008 to Dec. 31, 2008. Employees or the self-employed may use this optional amount in computing the deductible cost of operating an automobile, van, pickup or panel truck for business purposes. Employers that use the IRS rate or lower may deduct that amount as a business expense. However, employees who are reimbursed at a higher rate may be required to pay taxes on the difference between their reimbursement rate and the IRS standard mileage deduction because the IRS considers that amount to be wages. What Should You Do?
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