The IRS sets a Standard Mileage Rate at which you can deduct the use of your personal vehicles from your taxes when you use your vehicle for business purposes.  The rate has fluctuated in the past several years because of the price of gas and the price of cars. 

In 2007, the Standard Mileage Rate is $0.485 per mile for normal commercial business.  This amount adds up pretty quickly and can be significant contributor to your deductions.  For mileage taken for charity work, the standard tate is $0.14 per mile and mileage taken for medical purposes or moving, the standard rate is $0.20 per mile.

The Standard Mileage Rate is also a very good rate to use to reimburse employees when they use their personal vehicles for your business.  Also, when writing contracts with your clients and you include travel reimbursement, use wording that associates the mileage rate with the IRS Standard Rate.  That way, you won't have to pay an employee 48.5 cents per mile and only recover a fixed lower rate from your clients.

For more details about how these rates apply, please call.

 

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