Calculating mileage expenses is one of those small tasks within a company that sometimes takes up a disproportionate amount of time. And just when you’ve started to remember the optional rate issued by the IRS, it changes it.
And so it has for 2009. Effective January 1, 2009, the standard mileage rate for use of a car for business miles driven will be adjusted to 55 cents per mile. The rate is slightly lower than the rate that was announced in mid-2008 in response to skyrocketing gas prices.
The mileage rates for 2009 reflect generally higher transportation costs compared to a year ago, but the rates also factor in the recent reversal of rising gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, enter the calculation. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile.
As a reminder, companies with personnel policies about their mileage reimbursement should consider updating their policies immediately to reflect this change. In the future, employers can draft a policy that states that their standard mileage rate will be consistent with the IRS’s rate without reference to a particular number.
(H/T: What’s New)