|
The IRS has issued the 2006 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning January 1, 2006, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) is:
- 44.5 cents per mile for business miles driven
- 18 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations, other than activities related to Hurricane Katrina relief.
The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile. The mileage rate for charitable miles is set by statute.
The new rate for business miles compares to a rate of 40½ cents per mile for the first eight months of 2005. In September, the IRS made a special one-time adjustment for the last four months of 2005, raising the rate for business miles to 48½ cents per mile in response to a sharp increase in gas prices, which topped $3 a gallon. The 2006 mileage rates reflect that gas prices have since fallen.
For the first eight months of 2005, the standard rate for miles driven for medical or moving purposes was 15 cents per mile, and, except for special Hurricane Katrina rates, the standard rate for miles driven in service of a charitable organization was 14 cents per mile.
For the last four months of 2005, the agency raised the standard rate for miles driven for medical or moving purposes to 22 cents per mile. The standard rate for charitable miles remained at 14 cents per mile - except for charitable miles relating to Hurricane Katrina.
An updated Revenue Procedures provides detailed guidance on the use of optional standard mileage rate.
Special rates for Katrina-related charitable miles
Congress this year also approved special rates in connection with miles driven in service of charities providing Hurricane Katrina relief. For the period August 25 to 31, 2005, the rate for miles driven for charities providing Hurricane Katrina relief was 29 cents, for deduction purposes, and 40½ cents, for reimbursement purposes. For the months of September through December 2005, the special Katrina-related rates are 34 cents for deductions and 48½ cents for reimbursements.
For 2006, these Katrina-related charitable rates are 32 cents per mile for deduction purposes and 44½ cents per mile for reimbursement purposes.
...back to 8 December 2005
Further information:
IRS Announces 2006 Standard Mileage Rates
Revenue Procedure 2005-78
|
For Payroll and Human Resource Professionals
