High fuel prices prompt move: The Internal Revenue Service is increasing the tax deduction motorists can take for using private vehicles for business, a rare midyear move sparked by high gas prices. Starting July 1, motorists who use their personal vehicles for business will be able to deduct 55 ˝ cents a mile from their taxable income. That’s an increase of 4 ˝ cents per mile from the first six months of the year. The rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. The IRS normally updates the mileage rates once a year, in the fall, for the next calendar year. AAA says the average gas price is about $3.61 a gallon, up from $2.74 a year ago.
Median price rising: Fewer people bought new homes last month, the latest sign that the struggling housing market will not rebound this year. New-home sales fell 2.1% in May to a seasonally adjusted annual rate of 319,000 homes, the Commerce Department says. That’s far below the 700,000 new homes per year that economists say must be sold to sustain a healthy housing market. The median sales price rose 2.6% from April to $222,600. That’s more than 30% higher than the median sales of price of older, re-sale homes. Housing remains the weakest part of the U.S. economy, analysts say. Sales of new homes have fallen 18% in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.
