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...

Smaller companies slow to adopt new rules for internal controlsSmaller companies are not keeping up with larger rivals in adopting new internal controls as the Dec. 15 deadline approaches, John Kester of the Wall Street...
Ryan to chair tax panel, a possible 2016 platformHouse Republican leaders chose Rep. Paul Ryan (R-WI) on Tuesday to head the powerful House Ways and Means Committee for the next two years, giving him a high-profile platform...
For the most part, when you donate monetary gifts to charity, whether it’s in cash, by check or credit card charge, you can deduct the full amount on your tax return as long as you meet IRS substantiation requirements...

Already a member? log in here.

Editor's Choice

Upcoming CPE Webinars

Nov 24This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.
Dec 3The materials discuss the concepts and principles in the AICPA’s new special purpose framework.
Dec 9A key component to improving your firm’s workflow efficiency while enhancing your profitability at the same time is how you leverage emerging technologies.
Dec 9Kristen Rampe will cover how to diffuse the tension in challenging situations in this one-hour webinar.