Standard Mileage Deduction Rates – 2005 And 2006

If you’re in business, you’re interested in the IRS mileage
deduction rates The 2005 rates fluctuated because of high gas
prices and now the 2006 rates have been released
Standard Mileage Deduction – 2005
In a move not seen for some time, the IRS actually issued two
different mileage deduction rates in 2005 Mileage deduction
rates are the dollar value per business mile traveled that you
can claim as a deduction For instance, if you traveled 1,000
miles in your vehicle on business in 2005, you can deduction
1,000 multiplied by the designated rate
For the first eight months of 2005, the standard mileage
deduction rate was 405 cents a mile Using our previous
example, a person who drove 1,000 business miles in the first
months of 2005 would be able to deduct $405
As we all know, gas prices went through the roof in the last
four months of the year In a tremendous move, the IRS raised
the standard mileage deduction to 485 cents for business miles
undertaken from September through December This equates to a
deduction of $485 using our example
This increased rate only applies to the time period of September
through December It does not retroactively apply to the first
eight months of the year The IRS has not issued any directions
regarding how the two different rates will be noted on 2005 tax
returns
Standard Mileage Deduction – 2005
This past week, the IRS issued the standard mileage rates for
the 2006 year The new rate for standard business mileage will
be 445 cent per mile This rate should be used when you prepare
your tax return for the 2006 year, to wit, in 2007
The IRS should be applauded for raising the standard mileage
rate for the last four months of 2005 Still, I am sure we would
all prefer lower gas prices

Tags | business, deduction, mileage, miles, months, period, rates, result, return, returns, standard, tax, time, wit