• IRS Announces 2008 Standard Mileage Rates
• Watch For 2007 Economic Census Forms
• SCHIP May Avoid Overhaul, For Now
• AMT Battle Heats Up Congress

IRS Announces 2008 Standard Mileage Rates

The Internal Revenue Service recently issued the 2008 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be: 50.5 cents per mile for business miles driven; 19 cents per mile driven for medical or moving purposes; and 14 cents per mile driven in service of charitable organizations. The new rate for business miles compares to a rate of 48.5 cents per mile for 2007. The new rate for medical and moving purposes compares to 20 cents in 2007. The rate for miles driven in service of charitable organizations has remained the same. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile; the standard rate for medical and moving purposes is based on the variable costs as determined by the same study. Runzheimer International, an independent contractor, conducted the study for the IRS. The mileage rate for charitable miles is set by law. A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire or for more than four vehicles used simultaneously. Revenue Procedure 2007-70 contains additional information on these standard mileage rates.

Watch For 2007 Economic Census Forms Every five years millions of business owners provide valuable data to policymakers and information to update the Gross Domestic Product (GDP) through the Economic Census. In turn, businesses can discover facts about specific industries and communities; measures of business markets; and information to aid in the selection of new site locations and sales territories. Watch for your 2007 Economic Census form in December. If your business fits size requirements to participate, return the form by February 12, 2008. For more information, visit business.census.gov.   SCHIP May Avoid Overhaul, For Now   As the calendar year draws to a close, House Democrats have failed to convince enough Republicans to approve a second bill to expand the State Children’s Health Program (SCHIP). Now, a handful of states and organizations are pushing Congress for an extension of the program to ensure that the appropriate funds will be available in the meantime. The current funding resolution is set to expire this month. A proposed $35 billion expansion of SCHIP, and compromises related to President Bush’s veto of the measure, has been at the forefront of Congressional debates this year. SCHIP provides health coverage for families who are unable to qualify for Medicare. AMT Battle Heats Up Congress The Alternate Minimum Tax (AMT) is on the minds of members of Congress as the countdown to Tax Day draws nearer. Though indecision could postpone tax refunds in 2008, lawmakers still cannot agree whether a system overhaul is needed or whether to adopt a temporary patch. The AMT, which was intended to ensure all citizens paid some sort of tax and is not indexed for inflation, continues to affect more taxpayers each year. However, new finance rules set in place by House and Senate Democrats require tax cut measures to be offset by increases elsewhere. The House-passed HR 3996 complies with these rules, while one Senate measure proposes a single-year patch. Another Senate proposal advocates appealing the AMT altogether with no offsets arguing that the measure does not cut taxes but, rather, fixes a long-broken system. View the entire text of HR 3996 at http://thomas.loc.gov. For more information on the Alternate Minimum Tax, visit www.irs.gov. Washington Watch Online Visit the NASE Advocacy Web page to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business. Web site: http://advocacy.NASE.org.