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| Unbiased Product Review |
Death and taxes are the two sure things in life. There isn't much you can do about death, but tax deductions are a powerful tool in limiting the pain of paying your taxes. This is particularly true for tax deductions that increase every year.
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.
The first variation is mileage incurred for medical or moving purposes. Arguable, those are two different subjects, but who is going to argue with the IRS. The third variation is a deduction for mileage incurred in the service of a charity.
The IRS sets the deduction amounts each year based on the projected figures for the next fiscal year. It has just released the 2008 figures and the good news is the deduction amount for business miles has gone up.
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.
About the Author:
Aazdak Alisimo writes about taxes for BusinessTaxRecovery.com. Unbiased product reviews.
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