News: IRS ups per-mile gas deduction rates

The IRS has upped its deduction allowance for business travel to 58.5 cents per mile.

Who says the IRS doesn't have a heart? In response to soaring fuel costs, the federal tax agency is allowing you to deduct another eight cents per mile for business miles driven between July 1 and the end of the year. That increases the deduction to 58.5 cents per mile. The IRS usually changes rates annually, so the latest adjustment recognizes just how fast gas prices have risen in 2008. (The figure is intended to cover not just the cost of fuel, but insurance, depreciation, and other fixed and variable costs.) Keep in mind, however, that if you're tracking your actual costs of using your vehicle for tax purposes, you can't also write off the per-mile allowance. You must choose one or the other.