IRS Announces 2006 Standard Mileage Rates

N T E A ^ | February 1st, 2006

[M. Espinola]

The Internal Revenue Service (IRS) 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 Jan. 1, 2006, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) are:

• 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 new rate for business miles compares to a rate of 40.5 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 48.5 cents per mile in response to a sharp increase in gas prices.

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. Independent contractor Runzheimer International conducted the study for the IRS.

The mileage rate for charitable miles is set by statute.

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 IRS 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.

Special Rates for Katrina-related Charitable Miles

This year, Congress also approved special rates in connection with miles driven in service of charities providing Hurricane Katrina relief.

From Aug. 25 to Aug. 31, 2005, the rate for miles driven for charities providing Katrina relief is 29 cents for deduction purposes and 40.5 cents for reimbursement purposes. For September through December 2005, the special Katrina-related rates are 34 cents for deductions and 48.5 cents for reimbursements.

For 2006, these Katrina-related charitable rates will be 32 cents per mile for deduction purposes and 44.5 cents per miles for reimbursement purposes.

More information and limitations on the use of the standard mileage rates can be found in Revenue Procedure 2005-78.

[M. Espinola]

The IRS lowered the mileage reimbursement rate from 48.5 cents per mile for the last four months of 2005, to 44.5 cents per mile effective for 2006.

The IRS stated the rate was cut by 4 cents due to "lower" gasoline pump prices. Lower? Lower then what? How about climbing once again. Don't these IRS hacks buy gas?

Prices will skyrocket if the terrorist Iranians go insane threatening Persian Gulf supertanker oil lanes over the next few months.

What will the IRS rate be once gas hits $5 a gallon?

[Past Your Eyes]

Our accounting dept. notified us of this weeks ago.

[son of caesar]

the whole spirit of the article points out the danger of the whole Iran issue. their real intent is to harm us economically, since they know they cannot defeat us militarily at this time. see, rocky vs apollo creed, where creeds manager says, put this guy down, don't play with him, he will hurt you. we need to put Iran down and quickly.

[PeteB570]

Well, my 30k per year continues.

I keep a daily total and it's on paper.