Hi All,
It seems that this topic had come up a couple of times this year,
If you are using the Standard Mileage Rate for 2005 Business Miles you must break down the number of miles due to the Increase on Oct 1, 2005.
The Mileage rates are as follows for tax year 2005 Only :
From January 1st, 2005 through September 30, 2005 the
rate is $ .405 per mile
From October 1,2005 through December 31, 2005 the
rate is $ .485 per mile{b}
IRS Announces 2006 Standard Mileage Rates
WASHINGTON — The Internal Revenue Service today 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:
44.5 cents per mile for business miles driven;
18 cents per mile driven for medical or moving purposes; and
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.â€
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.
Frank Katz
Frank's Tax & Business Service
226 S. Cherokee ST
Kings Mountain, NC
704-739-4039
Fax 704-739-3934
It seems that this topic had come up a couple of times this year,
If you are using the Standard Mileage Rate for 2005 Business Miles you must break down the number of miles due to the Increase on Oct 1, 2005.
The Mileage rates are as follows for tax year 2005 Only :
From January 1st, 2005 through September 30, 2005 the
rate is $ .405 per mile
From October 1,2005 through December 31, 2005 the
rate is $ .485 per mile{b}
IRS Announces 2006 Standard Mileage Rates
WASHINGTON — The Internal Revenue Service today 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:
44.5 cents per mile for business miles driven;
18 cents per mile driven for medical or moving purposes; and
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.â€
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.
Frank Katz
Frank's Tax & Business Service
226 S. Cherokee ST
Kings Mountain, NC
704-739-4039
Fax 704-739-3934
