Feds lower mileage reimbursement rate for ‘09
December 5, 2008 by Bill MeltzerPosted in: Compensation, Compliance, In this week's e-newsletter, Latest News & Views
Bad news from Uncle Sam:
With the recent drop in gas prices, the feds have lowered the standard mileage reimbursement rate for 2009. The standard rate will be 55 cents per mile for all business miles driven, down from the rate of 58.5 cents a mile that was in effect in the second half of 2008.
The IRS had made a special adjustment for the second half of 2008 in order to provide a little relief from the price jump that saw gasoline prices rise to over $4 per gallon.
During the first six months of 2008, the rate was 50.5 cents per mile. As of January 1, 2009, the standard rates for the use of cars, vans, pickups, or panel trucks are:
- 55 cents per mile for each business mile driven
- 24 cents per mile for use related to medical or moving purposes, and
- 14 cents per mile driven in service of charitable organizations.
December 11th, 2008 at 2:11 pm
Who is this bad news for? As an employer, I think it’s great news and I think it should have gone down even more considering that the price of gas is now half of what it was then they made the special adjustment.
December 11th, 2008 at 3:33 pm
Mindy can’t be serious. Mileage reimbursement is supposed to cover not only gas but the normal wear and tear of using your personal vehicle for business travel. Normal wear and tear includes tires, oil changes, engine hours, insurance, etc. Bumping it up 8 cents was a joke for a gasoline pump increase of $2.00. As an employer, paying mileage is much cheaper than providing company vehicles. And if saving 3.5 cents per mile is so exciting for her, her business is in much more serious trouble than this will fix.
December 12th, 2008 at 9:15 am
Do the math. If you get 25 miles per gallon, divide the $2.00 increase by that; you get 8 cents. What’s unreasonable about that?
Now let’s say that gas is 1.65 in 2009. Divide by 25 mpg, you need almost 7 cents per mile to cover the gas. That leaves 48 cents per mile to cover wear and tear.
December 12th, 2008 at 9:53 am
I’m with Mindy. Ginger, using the math on your own argument, here are my calculatios:
Gas: 20 miles per gallon @ $2.00/gal = 10 cents per mile
Oil: 4000 miles per change @ $45/chg = 1.1 cents per mile
Tires: 25,000 miles per change @ $300 per set = 1.2 cents per mile
Depreciation: 150,000 miles per vehicle purchase @ $35,000 = 23 cents per mile.
Insurance is a fixed cost and should not be included, but even so: 12,000 miles per month @ insurance rate of $150 per month = 1.2 cents per mile.
A 40 cent per mile rate would cover it.
July 30th, 2009 at 11:48 am
Should there be a separate rate for hybrids? Our marketing rep drives a hybrid, which gets much better mileage than a standard car.