The Internal Revenue Service (IRS) announced an increase of 8 cents in the business related mileage rate deduction. The rate increase goes into effect July 1, 2008, and will increase from 50.8 to 58.8 cents per mile.

The IRS mileage rate increase is a welcome sign after a spike of more than 20% in gas prices this year.

When you use your automobile for business, the mileage incurred is legitimate business expense, the new rates will help offset the cost of higher gas prices. However, business owners may want to expensing their driving expenses instead of the IRS mileage reimbursement since they can usually write off more on their income tax.

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