2007 Standard Mileage Rates Released

Beginning January 1, 2007, the optional standard mileage rates used to calculate the deductible costs of operating an automobile for business will increase by 4 cents, to 48.5 cents per mile. The mileage rate for medical and moving purposes increases 2 cents, to 20 cents per mile driven. These standard mileage rates apply to cars, vans, pickups and panel trucks.

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. This year’s study was conducted by Runzheimer International on behalf of the Internal Revenue Service (IRS). The primary reasons for the higher rates were higher prices for vehicles and fuel during the year ending in October. Last week, the U.S. Department of Energy (DOE), reported the average retail price for regular gasoline increased for the first time in 12 weeks. The 1 cent increase, to 221.8 cents per gallon, is still 26.2 cents per gallon lower than this time the previous year.

The standard business mileage rate can not be used for any vehicle after any depreciation method under the Modified Accelerated Cost Recovery System (MACARS) is applied, a Section 179 deduction is claimed for that vehicle, a vehicle is used for hire or for more than four vehicles used simultaneously. Revenue Procedure 2006-49 contains additional information on these standard mileage rates.

The standard mileage rate for a vehicle driven in service of a charitable organization has been set at 14 cents for 2007, according to the IRS. The mileage rate for charitable miles is set by statute. The 14 cents per mile rate was put in place last year after Hurricane Katrina and codified in the Katrina Emergency Tax Relief Act of 2005 (Katrina Act) which was signed into law by President Bush on September 23, 2005.

You may like these other stories...

Renaissance avoided more than $6 billion tax, report saysThe Senate Permanent Subcommittee on Investigations said on Monday that a Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6...
A new Gallup survey found that 58 percent of smokers in the United States see increased state and federal taxes on cigarettes as an act of unjust discrimination, while 39 percent believe the tax hikes are justified.The...
Liberal groups object to bill barring taxes on Internet accessThe Internet Tax Freedom Act hasn’t been a controversial bill. In fact, it’s so popular that senators are seeking to pair it up with a far more...

Upcoming CPE Webinars

Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.