The Internal Revenue Service today issued the 2007 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning Jan. 1, 2007, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
- 48.5 cents per mile for business miles driven (compared to 44.5 cents in 2006);
- 20 cents per mile driven for medical or moving purposes (compared to 18 cents in 2006); and,
- 14 cents per mile driven in service to a charitable organization (the same as in 2006).
The primary reasons for the higher rates were higher prices for vehicles and fuel during the year ending in October.A year ago, the IRS made a special one-time adjustment for the last four months of 2005, raising the rate for business miles to 48.5 cents per mile in response to a sharp increase in gas prices, which topped $3 a gallon.
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. Runzheimer International, an independent contractor, conducted the study for the IRS. The mileage rate for charitable miles is set by statute.
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