Good news for road warriors: You’ll soon be able to claim a larger deduction for each mile you drive for business.

Starting July 1, the standard mileage rate will jump to 58.5 cents, up from the current 50.5 cents, the Internal Revenue Service said yesterday.

The increase of 8 cents a mile –– about 15 percent –– was set by the IRS yesterday, and is a direct result of skyrocketing fuel costs.

“It’s basically in recognition of the recent increase in gasoline prices,” IRS spokeswoman Peggy Riley said. “It’s eight cents, but it’ll help,” she said.

“It’s very good news for everyone who drives their car for business purposes,” said Patricia A. Thompson, former president of the Rhode Island Society of Certified Public Accountants.

Salespeople and others generally may claim a federal income-tax deduction for driving their own vehicles for business purposes.

In general, their deduction is based on a standard amount per mile –– known as the standard mileage rate –– or on actual expenses.

“A good portion” of motorists who use their cars for business claim the standard mileage rate because it requires less paperwork, said Thompson, tax partner at Piccerelli Gilstein & Co. LLP, a CPA firm in Providence.

The change announced yesterday by the IRS affects only the standard mileage rate –– and it could have a big impact, depending on how much you drive.

For example, suppose you drive 10,000 miles for business.

Under the old standard mileage rate, you generally would have been able to deduct $5,050.

Under the new standard mileage rate, you’ll generally be able to deduct $5,850 –– an increase of $800. If you’re in the 25-percent federal income tax bracket, that’ll save you $200 more in federal taxes.

(Keep in mind that the new rate is not retroactive; it takes effect a week from today, for business miles you drive from July 1 through December 31.)

The IRS typically sets a new standard mileage rate each fall, to take effect the following January. But in rare cases, the IRS changes the rate midstream if conditions warrant.

Because of high gas costs, the IRS decided to make a change now, IRS Commissioner Doug Shulman said in a statement yesterday.

“Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile. We want the reimbursement rate to be fair to taxpayers,” Shulman said.

The last time the IRS made a midstream change in the standard mileage rate was in September 2005, when fuel costs spiked after Hurricane Katrina.

A few other points:

• Some businesses also use the standard mileage rate as a benchmark for determining the amount at which employees are reimbursed for driving their vehicles for business purposes.

• Also yesterday, the IRS increased the standard mileage rate that you generally may use when claiming a deduction for medical expenses or moving costs. That rate goes to 27 cents a mile starting July 1, up from the current 19 cents a mile.

• The standard mileage rate for deducting miles driven for charitable purposes remains at 14 cents. (Only Congress has the power to change that rate.)

• The new rate changes are contained in Revenue Procedure 2007-70, posted yesterday on the IRS Web site:

www.irs.gov

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