I heard that the standard milage deduction was recently raised from 50.5 cents for 2008...is this true?

Question

If this is true, then how much is the new rate?

Answer 1

Yes, they announced yesterday that the rate would be 58.5 cents per mile from July 1 to the end of 2008.

Answer 2

In Canada there is no standard milage deduction.  If you are claiming vehicle expenses on your income tax it has to be fore business purposes.  You also need to keep a driving log in which you record each and every trip you take in the vehicle and whether it is for business or personal use.  When you file you taxes, the total amount of vehicle expenses is then multiplied by the business use portion, for instance 60% of your driven kilometres, and the resulting amount is your deduction claimed.

Alternatively, if you are wondering how much you can request from an employer or client for milage in a contract, the amount varies by industry, area and client/employer.  For instance you will be paid a higher reimbursement if you work for an oil company in Fort McMurray, Alberta than if you work for Bob's Plumbing in Melita, Manitoba.

I do contract work in both Alberta and Manitoba and my rates are different for each province.  I charge the .48 cents per kilometer in Alberta (the Alberta Government has it's rate currently set at .44 cents per kilometer) and I charge .45 cents in northern Manitoba while the average rate in Manitoba Government departments is .41 cents per kilometer.

Hope this answers your question either way.

Answer 3

Actually, the standard mileage deduction was raised TO 50.5 cents per mile for 2008.  This compares to 48.5 cents per mile in 2007.  Here are the comparisons for mileage deduction for 2007 and 2008:

Beginning Jan. 1, 2008:

    * 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.

As of Jan. 1, 2007:

    *48.5 cents per mile for business miles driven;

    *20 cents per mile driven for medical or moving purposes; and

    *14 cents per mile driven in service to a charitable organization.

Answer 4

Rates in Canada are on kilometres, not miles, and do not apply to deductible amounts for employment expenses. Check out CRA guide T4044. In this guide, you will not find mention of a per kilometre rate at all.

The per kilometre rate applies to the following two things:

- medical travel when you have to drive your own car at least 40 km (one way) in order to obtain medical services not available in your own municipality

- moving at least forty kilometres closer to your new place of work or a new educational institution.

The rate claimable varies from one province to the next, and are available at the following link:

http://www.cra-arc.gc.ca/tax/individuals...