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.”
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.
