Submitted by: Crystal O'Brien(276) MMC Inc. Log in to become a member of Crystal O'Brien's Fan Club!
IRS Authorizes Another Increase In Mileage Reimbursements
Perhaps not a minute too soon, the IRS has increased the optional standard mileage rate. Generally, what this means is for taxpayers who itemize deductions, they can deduct up to 58.5 cents per mile for miles driven for business, charity, medical, or in connection with moving. This rate will be accounted for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008. This increase is in response to rising gas prices and the slowing current economy and is an extraordinary increase in that it comes mid-year as opposed to at the end of a year, if at all.
In a statement issued during a June 26, 2008 press release, IRS Commissioner Doug Shulman made a statement: "Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said Shulman. "We want the reimbursement rate to be fair to taxpayers."
What Does This Mean For Employers?
In states like California, employers are not legally required to apply IRS mileage rates to their mileage reimbursement policies. However, employers are responsible for reimbursing employees their actual expenses incurred as a requirement and condition of employment. Because IRS mileage rates provide fair guidance as to how to calculate actual mileage expense, many employers readily rely on these rates. Thus it is anticipated that many employers will follow the IRS's lead and increase mileage reimbursement accordingly.
It is laws like these that employers and employees alike need to stay updated on to make sure businesses are abiding by all the rules and regulations that are constantly evolving and changing. If ever in question or doubt, please do not hesitate to contact a Human Resource Consulting firm like MMC.
Crystal M. O’Brien, Esq. serves as MMC’s Employment Law Manager/Corporate Counsel.After receiving a double-degree in psychology and sociology from OberlinCollege in 1988, Ms. O’Brien earned a workers’ compensation insurance claims adjusting license in 1991. She completed post-graduate studies in Human Resources Management at Portland State University’s Graduate School of Urban & Public Affairs from 1996-1998 and earned a Juris Doctorate and Certificate in Dispute Resolution from Willamette University College of Law in 2001.Immediately following law school, Ms. O’Brien served as a judicial clerk to the Honorable Faith Ireland (ret.) of the Washington State Supreme Court.She is licensed to practice law in California Washington as well as before U.S. District Courts in each state.Collectively, Ms. O’Brien has 19 years of litigation experience.
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