Rules To Use Standard Mileage Expense Rate

There are two basic rules set by IRS for using standard mileage expense rate:

1. First Year Rule – When you buy a car or truck and you would like to use that  vehicle for your business you can claim standard mileage expense (for the second half of 2008 the standard mileage expense rate is 58.5 cents). However, you have to make this decision in the first year your car is available for business use. If you use actual expenses for your car in the first year you cannot switch back to using standard mileage rate.
2. Five Car Rule – If you have a business, like fleet  which operates five or more car simultaneously you cannot use standard mileage rate.
3. For Hire Rule – Your car must not be used for hire such as a taxi.

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