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Boring but important: Government mileage reimbursement rate adjusted to 58.5 cents/mile?

Hold on…Not yet!

Mileage reimbursement rates for federal employees using their own vehicle for government business could go up by 8 cents soon. 

Rates would increase if the government continues to use the Internal Revenue Service (IRS) standard rate - which has recently risen - for calculating the tax-deductible costs for operating an automobile for business purposes.

For those unfamiliar with the reimbursement program, federal employees are allowed to request the use of their own personal vehicle when there is no government transportation available or if it is more advantageous for the government.  When approved, the member fills out a travel reimbursement for the mileage to be paid at the government approved rate.

Even though the IRS has raised its standard rate, an increase for federal employees is not guaranteed.  The General Services Administration (GSA) sets the mileage reimbursement rate(s) for federal employees and uniformed members. Currently, the $.505/mile rate is at the ‘business travel’ (TDY) ceiling established by the IRS.  Historically, the GSA has followed the IRS rate.

By federal law, TDY mileage rates are based on cost data collected by GSA, but TDY mileage rates can never be higher that the rate allowed by IRS.

Normally, the IRS updates mileage rates once in the fall for the next calendar year; however, due to the increasing fuel prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile.

Recently, the National Treasury Employees Union demanded a mid-year rate increase asking for immediate action in extending the higher mileage reimbursement rate to federal employees.

The mileage reimbursement proposal does not apply to employee transfers or relocations. Those are designated as transportation expenses, rather than allowances for the cost and operation of a vehicle, according to GSA.

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Published Jul 02 2008, 11:14 AM by seniorexec |  Email |  Print



Comments

mileageblogger said:
www.MileageLogger.com is providing an exciting new business tool for helping business owners deduct 58.5 cents for every mile. It's a revolutionary device that logs business miles automatically (hands free) and sends the trip records to an online account. IRS requires the records to be contemporaneous and since the device records the mileage as it happens you will have no fear of audits.
July 2, 2008 1:24 PM
RugerRedhawk said:
That's excessive. Why not use a 30mpg as the standard for calculation? After all if you're traveling for work, it's quite unlikely you need a pickup truck or a sports car. At 4.50 a gallon with a 30mpg car, you're looking at $0.15/mile in fuel costs. Add in $0.01/mile for a $30 oil change every 3,000 miles. Then, oh I don't know, double it to compensate for wear and tear on the vehicle, insurance, etc... That would still only bring it to $0.32/mile. I wonder all the data they use to come up with this $0.585/mile number. It seems very high to me.
July 3, 2008 12:34 AM

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