‘09 Mileage rate released
November 25, 2008 by Carol KatarskyPosted in: Communication, In this week's e-newsletter, Latest news & views, T&E, Tax compliance
IRS is keeping you on your toes: The second change in six months was just announced.
Effective Jan. 1, 2009, IRS is setting the standard business mileage rate at 55 cents per mile.
That’s down 3.5 cents from the rate set for July 1-Dec. 31, 2008, so don’t be surprised if some employees grumble. If you do field complaints about the lower reimbursement rate, it’s worth pointing out that the 55-cent rate is still a net increase from the 50.5 cent rate that was in effect in Jan. 1-June 30.
Two other rates worth noting
Also effective Jan. 1 are the mileage rates for:
- medical or moving purposes (24 cents per mile), and
- charitable service (14 cents).
You’d use the moving rate if you reimburse an employee for a job-related move. That rate is slightly lower, down from 27 cents in the second half of ‘08. The charitable service rate — which is set by Congress, not IRS — is unchanged. You can get the full details from IRS.
Tags: A/P, Economic outlook, IRS, mileage rate, T&E
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November 26th, 2008 at 4:31 pm
Are milage rates suggested or mandatory?
November 26th, 2008 at 4:37 pm
Well, that depends how you mean: They’re mandatory in the sense that if your company reimburses MORE than the standard rate, the overage is taxable income to the employee. (So, if your company sets its rate at 60 cents per mile, 5 cents of each reimbursed mile woudl be taxable.)
But, your company can set its own rate for internal use. Or, for that matter, not reimburse at all — as long as you’re willing to deal with grumbly employees.