This week the IRS announced an increase in the optional standard mileage rates for the final six months of 2008. Mileage rates are normally updated once a year, but the IRS made this special mid-year adjustment in recognition of rising gasoline prices and in response to the urging of Senators from both parties.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70. The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, and remains at 14 cents a mile.

The new rates are published in Announcement 2008-63.