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The IRS has announced increases in the optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, or moving expense purposes and for determining the reimbursed amount of these expenses that is deemed substantiated. This modification results from recent increases in the price of fuel.
The revised standard mileage rates are:
- business 48½ cents per mile, up from 40½ cents per mile
- medical and moving 22 cents per mile, up from 14 cents per mile
The mileage rate that applies to the deduction for charitable contributions continues at 14 cents per mile. The rate is set by law, not by the IRS.
These revised rates apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after September 1, 2005, and to mileage allowances that are paid both
- to an employee on or after September 1, 2005, and
- with respect to transportation expenses paid or incurred by the employee on or after September 1, 2005.
For the rates that apply prior to September 1, 2005, see 2005 Standard mileage rates
The IRS has stated that the rates for 2006 will not be set until closer to January 2006 and if, as many predict, gas prices decline in the coming months, the 2006 rate could be less than 48½ cents.
...back to 15 September 2005
Further information:
IRS Increases Mileage Rate Until Dec. 31, 2005
Optional Standard Mileage Rates
Optional Standard Mileage Rates
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For Payroll and Human Resource Professionals
