Tax Article - 2005 Standard Mileage Rates and Employee Reimbursement Rules Released (IR-2004-139; Rev. Proc. 2004-64)
The IRS has released the 2005 optional standard mileage rates that may be used by employees, self-employed individuals, and other taxpayers when computing the deductible costs of operating a passenger car for business, medical, moving or charitable purposes. For 2005, the standard rate for business mileage has been increased to 40.5 cents per mile from 37.5 cents per mile. The standard mileage rate for medical or moving expenses has been increased to 15 cents per mile from 14 cents per mile. The mileage rate for charitable purposes remains at 14 cents per mile. When the 2005 business standard mileage rate of 40.5 cents is used, depreciation will be considered to have been allowed at a rate of 17 cents per mile. This depreciation rate will reduce the taxpayer's basis in the passenger car.
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