IRS sets 98 per-mile driving rate

The Internal Revenue Service has announced an increase in the 1998 national per-mile driving rate from 32.5 cents, up from 31.5 cents in 1997. The driving rate is the amount the U.S. taxpayer can deduct for automobile expenses on the 1998 tax return for business miles driven.

Factors responsible for the rise include increasing insurance costs, taxes and vehicle prices. Increases occurred even though the economy remained relatively stable with a low inflation rate, said Larry Snyder, director and automotive cost expert at Runzheimer International.

The standard was developed by Runzheimer, a Wisconsin-based consulting firm that specializes in travel and living costs.

The IRS uses the national average as a tool to compare the actual driving expense records businesses use as a basis to deduct automotive expenses.