The IRS this week lowered the optional standard mileage rate for 2006 to 44.5 cents per mile for business miles driven, down from the 48.5 cent rate set for the last third of 2005.
The standard mileage rate is used to calculate the deductible costs of operating a vehicle for business, charitable, medical or moving purposes. The 48.5 cent rate set for the last four months of 2005 was a one-time adjustment in response to the sharp increase in gas prices, which topped $3 a gallon. The standard mileage rate for the first two-thirds of 2005 was set at 40.5 cents per mile.
Beginning Jan. 1, 2006, the standard mileage rates for use of a car (including vans and pickup trucks) for medical or moving purposes will be 18 cents per mile. The rate for miles driven in service of charitable organizations, other than activities related to Katrina, will be 14 cents per mile. For 2006, the Katrina-related charitable rates will be 32 cents per mile for deduction purposes and 44.5 cents per mile for reimbursement purposes.
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