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Charlie from PearBudget dropped a line to point out that the U.S. Internal Revenue Service is increasing the mileage reimbursement mid-year. The rate is 50.5 cents per mile right now, but will see a 16% jump next week. Here’s the official IRS notice:
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.
This is important news to many GRS readers, especially small business owners and those who have jobs that require a lot of travel by car. When I was actively selling boxes, I could log 400 miles per week. An eight cent increase in the mileage reimbursement would have meant an extra $32/week for gas money and other expenses.
Here are some other important personal finance stories from around the web:
Last February, Jonathan at the excellent My Money Blog posted a list of five ways to get a free credit score. None of these require trial periods. These methods don’t tell your actual FICO score, either, but they’ll give you an idea.
At Delicious Baby, Debbie has posted some money saving tips the travel industry doesn’t want you to know. She suggests a home exchange (which I’m hearing more and more about, though never from anyone with first-hand experience), eating where the locals eat, and packing light. This is a great list.
Finally, JLP at All Financial Matters sounds like a crusty old man when he complains about slow-walking teens in baggy pants, but he has a point when he argues that we’re all self-employed. Too many people treat their jobs as if they’re throwaways. They’re not. Every job is an audition for something bigger. It’s a chance to sell yourself. Looking back, I know I did piss-poor work at some jobs, and the lack of quality had a real impact on the direction of my life. Even a menial job like flipping burgers should treated as an important step to something else. Hm. Maybe this is a subject for a future post…
June 25th, 2008 at 4:54 pm
he argues that we’re all self-employed. Too many people treat their jobs as if they’re throwaways. They’re not. Every job is an audition for something bigger. It’s a chance to sell yourself.
Of course, I’ve heard some people use the “we’re all self-employed” argument to push that one shouldn’t try too hard at any job - so you can save the energy for your “real” job / passion.
It would be interesting to see what you’d write about this, JD. I tend to frame it as “see yourself as a business”, meaning:
P & L. If a business isn’t profitable it will (eventually) tank. You can’t run your life on a deficit for very long either.
Capital improvements. Business have to replace machinery and/or remodel workspace; so do you. Just making enough this month to pay this month’s bills isn’t enough - you need to put money aside for capital improvements like buying a house, replacing the roof, or replacing the broken hot water heater.
Reputation matters. If someone hires you and you suck, guess what? They’ll tell people.
Skill is built through practice. Things like managing your cash flow, being punctual, acting professional, are working despite a sinus headache are useful skills.
June 25th, 2008 at 5:00 pm
This is a first-hand experience plug for home exchange. When I was a kid we spent one month every other summer in Europe - housing and car transport paid for - in incredible locations my family could never have afforded otherwise and the homes tended towards the upper-middle class/wealthy side (but there’s a definite range). The families we exchanged with were lovely and my parents still send Christmas cards each year.
Now that they’re retired, they exchange homes more than ever. They arrange to meet the family and exchange keys at one end, so there’s a face-to-face personal connection to develop some trust. It helps that they live in a “desirable” city (Los Angeles) but really, there’s something for everyone. They’re trading in Olympia, WA this year to attend a wedding and see Washington, so even if you don’t live in Paris or NYC, it’s worth listing your house and seeing what offers you get!
June 25th, 2008 at 5:03 pm
I have a question about the mileage thing that maybe someone can answer for me. What exactly qualifies as “business”? Does that mean the miles I drive to work everyday or only if I have using my car to do something required by work. Also, how do I document this for IRS purposes?
I didn’t know there where medial/moving allowances as well. How do these work?
As always, great post.
June 25th, 2008 at 5:25 pm
Hm, as fodder for a future post… maybe you could talk about the power of defining where you are professionally for your own benefit & to see potential? Even if you have a burger flipping job & are still in college, you can still sit down and write a resume. Even if you have been in the same job for two years — well, that is the most important time to write a resume!
For instance, I see myself at my current job for 2-3 years before maybe moving to a new city or something. I want to travel to Australia (likely by myself) before I move to a new city. After I elimiante my (non student) debt and build up my emergency fund, I want to save money for that trip and then a cushion for moving & being unemployed in a new city. That means I need to understand the sorts of pay raises I will get in the next 3 years, reminding myself to not increase my standard of living for the next 3 years, etc. Planning for both long- and short- term futures mean knowing where I stand with my job!
June 25th, 2008 at 5:39 pm
i’m also curious about what counts as business miles. my husband will be commuting about 170 miles per day to go to college this fall. do those miles count?
do you have to itemize?
geez, i know so little of tax laws that i don’t use.
June 25th, 2008 at 7:12 pm
>> Last February, Jonathan at the excellent My Money Blog posted a list of five ways to get a free credit score. None of these require trial periods. These methods don’t tell your actual FICO score, either, but they’ll give you an idea. <<
Here’s another. Get your next credit card when WAMU has a 0%. They track your FICO score online, and you can access it at wamucards any time you want. For free.
June 25th, 2008 at 8:05 pm
@Brian and Leigh:
Business mileage - you cannot deduct mileage for commuting, only for travel for work. So, you can deduct miles for driving to meet clients, etc. Commuting for school would also not qualify. You DO have to itemize to claim this deduction.
Moving allowance mileage can be claimed as a deduction for AGI (you DO NOT have to itemize) if you are changing job sites, your new job is more than 50 miles further from your old house than your old office was, and you stay in that position for 39 weeks out of the next 12 months.
June 26th, 2008 at 1:06 am
Past year we did a great house exchange: our flat for a flat in a great and bohemian neighbourhood in Paris. One month in Paris for the price of our rent back home is worth the trouble of looking for swappers!
June 26th, 2008 at 7:20 am
“Even a menial job like flipping burgers should treated as an important step to something else. Hm. Maybe this is a subject for a future post…”
I’d say so. I think that could be a great blog post–looking forward to it, J.D.
June 26th, 2008 at 7:35 am
@Ashley, Brian and Leigh:
If you’re an independent contractor, you don’t need to itemize in order to get the mileage deduction. You need to include it as part of your schedule C paperwork, though. Thanks for the heads-up, JD.
June 26th, 2008 at 1:14 pm
This isn’t exactly related to the last link, but I noticed you put something about flipping burgers, so I wanted to add my two cents:
My first job, ever, was the summer after I graduated high school. I worked at a sandwich shop that had just opened up. About halfway through the summer we got a new manager, who I became friendly with. At the end of the summer, because I had put in so much work into the shop (at the risk of sounding like I’m tooting my own horn, the other employees were slackers), the manager actually asked if I would be willing to stay on as assistant manager.
This was my very first job. I was seventeen at the time. I didn’t accept, simply because I was moving to another city four hours away for college, and that would be a horrible commute ;), but it did help me realize that hard work gets you noticed. As such, at my current job as a library page for Inter-Library Services, my supervisor is constantly impressed that I check the online catalog for things that aren’t on the shelves or don’t match the call numbers (see, and here I was thinking that was common sense!). It’s the going above and beyond the call of duty that gets you noticed.
June 26th, 2008 at 2:39 pm
There is an exciting business tool provided by http://www.MileageLogger.com that logs business miles automatically, no more pen and paper.
June 26th, 2008 at 10:42 pm
taxguru:
Thank you so much. I was going to spend my weekend divising excell spreadsheets for my miles (recently changed my job and I am now an inedependent contractor). Now I will go hiking.
Does anyone know if, as an independent contractor, if you can also write-off your maintenance for your car, or what other expenditures you may use when you itemize your taxes? This is my first year filing as an independent contractor.
June 28th, 2008 at 7:23 pm
Many housing counseling agencies can provide free credit reports with scores if you are in the market to buy a home (and its a soft pull, so there’s no ding on the credit score). The agency I run uses a Freddie Mac system that pulls Transunion and Experian at no cost, gives a report to let us know if someone is mortgage ready or not, and if they’re not, it tells us what is standing in the way of seeing a lender. We have grant funds that pay for us to pull 3 bureau reports with scores as a soft pull for foreclosure prevention clients in our area. To find a housing counseling agency near you, visit HUD’s website. Counseling tools and quality will vary, but its certainly worth looking into!