NEW IRS MILEAGE REIMBURSEMENT
RATE EFFECTIVE JULY 1, 2008
The IRS just announced an increase
in the standard mileage rates,
effective July 1, 2008. The new rate
will be 58.5 cents per mile for all
business miles driven from July 1,
2008 through December 31, 2008.
The old rate in effect for the first six
months of 2008 was 50.5 cents per
mile.
The IRS typically updates the mileage
rates only once per year in the fall for
the next calendar year. However, in
recognition of recent gasoline price
increases, the IRS made this special
adjustment for the final months of
2008.
The optional business standard
mileage rate is used to compute the
deductible costs of operating an
automobile for business use in lieu of
tracking actual costs. This rate is
also used as a benchmark by the
federal government and many
businesses to reimburse their
employees for mileage.
This new increase is important for
employers in California, because
employers have a legal duty to
indemnify employees for necessary
expenses incurred in the discharge of
their duties. Employers who base
their auto reimbursements on the
IRS rate should increase the mileage
reimbursement rate for employees to
match the new IRS rate.
Using the IRS mileage rate does not
necessarily guarantee that the
employer has fully reimbursed the
employee for actual travel expenses
and is not the only way an employer
can reimburse an employee for travel
expenses. If employees can prove
that their actual cost is higher, the company must make the higher
reimbursement.
With so many requirements
surrounding employer reimbursement
of business expenses, it's advisable
to become familiar with the options
an employer has available for
complying with the applicable legal
requirements.
Your contact at the Firm is ready to
be of assistance as needed.
For more information, call us today at (818) 508-3700,
or visit us on the web, at
www.brgslaw.com.
Sincerely,
Richard S. Rosenberg
Partner
BRG&S, LLP
