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March 17, 2005 7:20 AM CST

IRS Sets 2005 Standard Mileage Rates

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The Internal Revenue Service (IRS) released the optional standard mileage rates to use for 2005 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes.

As of Jan. 1, 2005, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) are:

  • 40.5 cents a mile for all business miles driven, up from 37.5 cents a mile in 2004;
  • 15 cents a mile when computing deductible medical or moving expenses, up from 14 cents a mile in 2004; and
  • 14 cents a mile when giving services to a charitable organization.

The three-cent increase in the business mileage rate was the largest one-year rise ever. The primary reasons were higher prices for vehicles and fuel during the year ending in September. The charitable standard mileage rate is set by law.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire, or for more than four vehicles used simultaneously. Revenue Procedure 2004-64 contains additional information on these standard mileage rates.

For more information, visit www.irs.gov.


About the Author

Masonry, the official publication of the Mason Contractors Association of America, covers every aspect of the mason contractor profession - equipment and techniques, building codes and standards, business planning, promoting your business, legal issues and more. Read or subscribe to Masonry magazine at www.masonrymagazine.com.

 

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