IRS Announces 2006 Standard Mileage Rates
December 15, 2005
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STANDARD MILEAGE RATES |
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2004 |
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1/1/05 through 8/31/05 |
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9/1/05 through 12/31/05 |
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2006 |
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Business |
37.5¢ |
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40.5¢ |
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48.5¢ |
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44.5¢ |
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Charitable |
14¢ |
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14¢ |
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14¢ |
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14¢ |
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Medical and Moving |
14¢ |
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15¢ |
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22¢ |
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18¢ |
The Internal Revenue Service 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 Jan. 1, 2006, the standard mileage
rates for the use of a car (including vans, pickups or panel trucks) will be:
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44.5 cents per mile for business miles driven;
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18 cents per mile driven for medical or moving
purposes; and
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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, which topped $3 a gallon.
“The IRS took the extraordinary step of
temporarily increasing the standard mileage rates in the aftermath of Hurricane
Katrina,” IRS Commissioner Mark W. Everson said. “We promised to continue
closely monitoring the situation. The 2006 mileage rates reflect that gas prices
have dropped.”
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. Runzheimer International, an
independent contractor, 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 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.
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 Aug. 25 to Aug. 31, 2005, the
rate for miles driven for charities providing Hurricane Katrina relief is 29
cents, for deduction purposes, and 40.5 cents, for reimbursement purposes. For
the months of 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 mile
for reimbursement purposes.
Revenue Procedure 2005-78 contains additional
information and limitations on the use of the standard mileage rates.
Link:
Revenue Procedure 2005-78
Please contact us if you have
any questions regarding this information.
Material discussed in this
Tax Newsletter is meant to provide general
information and should not be acted on without obtaining professional
advice appropriately tailored to your individual needs.
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