Standard_Mileage_Deduction_Rates___2005_and_2006 by zhucezhao

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									Standard Mileage Deduction Rates – 2005 and 2006

Word Count:
289

Summary:
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.


Keywords:
standard mileage deduction, rates, irs, tax deduction, 2005 tax, 2006 tax


Article Body:
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 40.5 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 48.5 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 – 2006

This past week, the IRS issued the standard mileage rates for the 2006
year. The new rate for standard business mileage will be 44.5 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.

								
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