WASHINGTON (AP) — The Internal Revenue Service is increasing the tax deduction motorists can take for using private vehicles for business, a rare midyear move sparked by high gas prices.
Starting July 1, motorists who use their personal vehicles for business will be able to deduct 55 ½ cents a mile from their taxable income. That's an increase of 4 ½ cents from the first six months of the year.
The rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
The IRS normally updates the mileage rates once a year in the fall for the next calendar year. AAA says the average gas price is about $3.61 a gallon, up from $2.74 a year ago.
