It cost me nearly $50 to fill my tank this week – $50! And I drive a pretty fuel efficient car. Gas in my home town has hit $4.25/gallon for plain old standard gas. Yuck. Gas prices are just climbing and climbing.
At least there’s a small break: the mileage rate for business miles has finally been upped for tax purposes. The mileage rate will increase by eight cents to 58.5 cents a mile for all business miles driven as of July 1, 2008.
The mileage rate for deductible medical or moving expenses will increase by eight cents to 27 cents a mile.
Sadly, the rate for volunteering at charitable organizations is set by statute and remains at a pathetic 14 cents a mile. Congress, are you reading?
(Image: Newscom)
Mileage rates. I got to it, okay? Yes, this is #1 question I’ve been asked for the 2006 tax year. Take a deep breath. Here are the rates:
- The standard mileage rate for business use of a car, van, pick-up or panel truck is 44.5 cents per mile.
- The standard mileage rate for the cost of operating a vehicle for medical reasons or as part of a deductible move is 18 cents per mile.
- The standard mileage rate for using a car to provide charitable services solely related to Hurricane Katrina is 32 cents per mile. Otherwise, the rate for providing services to charitable organizations is 14 cents per mile.
With gas prices on the rise, it’s no surprise that the mileage rates as determined by IRS were a little higher this year than in years past.
For the calendar year 2007, the standard mileage rates will be:
- 48.5 cents per mile for business miles driven;
- 20 cents per mile driven for medical or moving purposes; and
- 14 cents per mile driven in service to a charitable organization.
Taxpayers may opt to use the standard mileage rates for business use or the actual cost of operating the car; the election, once made must be used for the entire life of the vehicle. Depending on the age and maintenance requirements of your car, the actual cost of operating the care for business could be greater than the standard mileage rates.
The standard mileage rate for charitable use is fixed by statute and there is no “actual cost of operating” option.
The IRS has increased the mileage rate for the business use of a car, to 48.5 cents per gallon, from 40.5 cents per gallon effective September 1, 2005. The rate is only good through December 2005. The IRS anticipates that it will, later in the fall, make the annual adjustment for 2006.
