| Automobile Mileage reimbursement Rate |
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The IRS gives and the IRS takes away. Effective September 1, 2005, the automobile mileage reimbursement rate increased 8 cents to 48.5 cents per mile. As gas prices declined, the IRS again changed the automobile mileage reimbursement rate to 44.5 cents per mile, effective January 1, 2006. The reimbursement rate is in lieu of deducting the actual cost of automobile operations. It this better? Read the article in the January 2006 issue of tax report. In either case, you must keep a log of your business mileage, and the business purpose of the vehicle usage.
The mileage rate for moving expenses also decreased to 18 cents, while the rate for volunteer charitable activities remains 14 cents per mile. The reason charitable use did not change is that the charitable rate is incorporated in the law, requiring Congressional action to change, while Congress left the business reimbursement rate to the IRS to determine.