IRS to Raise Gas Mileage Rate

A couple of gas-related stories. One is good news for people who use their cars for business. The other isn’t bad, but it indicates that gas prices may not go down as quickly as first thought.

IRS hikes mileage rate

High gas prices have led the Internal Revenue Service to raise the gas mileage rate. The IRS will now let drivers get back an additional four and a half cents per mile. Starting on July first, you can deduct 55 and a half cents per mile if you use your private vehicle for business travel. This is a rare mid-year change brought on, as I mentioned, by the high cost of gas.

The IRS is also raising the deductions for medical and moving expenses to 23 and a half cents per mile, up from 19 cents. It may not sound like a lot, but it can add up. In 2008, taxpayers deducted $23 billion in business-related fuel costs.

Gas price drop not as quick as thought

And over the next 30 days, the Department of Energy plans to release 30 million barrels of oil. But it may be several weeks before Americans see that show up at the gas pump. Still,  prices continue to fall. For example, in the Tulsa area, drivers are paying around $3.38 a gallon this week, compared to $3.58 a month ago.

And with a big holiday coming up, gas prices are on the minds of travelers.  A AAA survey found that 44% said the price at the pump would impact their 4th of July travel plans.

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