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.
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Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.