High gas prices may have declined since their peak in June, but the IRS is offering relief for business travelers who are more affected by the persistent prices. Starting in July, there is a 4 cent increase to the standard mileage rate for business vehicle use, a total of 62.5 cents per mile, until year-end.
Managing director Amy Bloom said most businesses use the standard mileage rate to reimburse employees for business driving, since “[it] is much easier to simply track your mileage.”
For those who are self-employed, Bloom noted most opt for calculating the actual car expenses over the standard mileage rate. “The more you use the car the more likely it will benefit the self-employed to use actual expenses,” she said. The downside, however, is that it requires more record-keeping, and “some people don’t want to be bothered keeping detailed records of all the auto expenses that they incur.”
Actual expenses include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) that can be attributed to the business miles driven in the vehicle.
Read the full article published by Newsday.