Copyright© 2005 by School Services of California, Inc.

                                      Volume 18                   For Publication Date: December 16, 2005             No. 25

IRS Issues 2006 Mileage Reimbursement Rate

The Internal Revenue Service (IRS) has issued the 2006 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning January 1, 2006, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) will be 44.5¢ per mile for business miles driven.  

The new rate for business miles compares to a rate of 40.5¢ per mile for the first eight months of 2005. In September, the IRS made a special one-time adjustment for the last four months of 2005, raising the rate for business miles to 48.5¢ per mile in response to a sharp increase in gas prices, which topped $3 a gallon.  

IRS Commissioner Mark W. Everson said. “We promised to continue closely monitoring the situation. The 2006 mileage rates reflect that gas prices have dropped.”

—John Gray