2005 Mileage Deduction Now 40.5 cents

Discussion in 'Business Operations' started by tonygreek, Mar 24, 2005.

  1. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,480

    in case anyone might not be aware....

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    2005 Standard Mileage Rates Set

    IR-2004-139, Nov. 17, 2004

    WASHINGTON — The Internal Revenue Service today 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.
    Beginning Jan. 1, 2005, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

    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 3-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.

    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. An independent contractor, Runzheimer International, conducted the study for the IRS.
    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.

    http://www.irs.gov/newsroom/article/0,,id=131232,00.html
     
  2. Carolina Cutter

    Carolina Cutter LawnSite Senior Member
    Posts: 987

    I guess this will help offset the rising fuel costs......dang shame we have to wait till the end of the year though.
     
  3. grass_cuttin_fool

    grass_cuttin_fool LawnSite Gold Member
    Posts: 3,504

    Im glad for the increase, it will help some on the bottom line
     

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