IRS Decreases Business Mileage Rate to 55 Cents for 2009

Overview
The IRS has announced that the standard business mileage rate for transportation expenses paid or incurred beginning January 1, 2009, will be 55 cents per mile, down from the 58.5 cents per mile rate in effect during the second half of 2008 [IR-2008-131, released 11-24-08].

The mileage rate may be used to compute the deductible cost of operating a passenger car (also vans, pickups, or panel trucks) for business purposes. It may also be used by employers that elect to use the "cents-per-mile" valuation method for purposes of determining the amount that needs to be imputed to an employee's income for personal use of certain company-owned or leased non luxury vehicles.

The 2009 standard rate for miles driven for medical or moving purposes will decrease to 24 cents per mile, down from the 27 cents per mile rate in effect during the second half of 2008.

In addition, the standard mileage rate for operating a passenger car for charitable purposes is set by law and will stay at 14 cents per mile in 2009.