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| Governmental Regulations |
| IRS Boosts Standard Mileage Rates |
The Internal Revenue Service recently increased the mileage reimbursement rage that businesses can deduct as an expense to 48.5 cents per mile. The rate had been 40.5 cents per mile since the beginning of 2005. The change will be retroactive to September 1st.
The move to increase rates in the middle of the year is unprecedented. Reports indicate that the change is in response to the high gasoline prices resulting from Hurricane Katrina.
“This is about fairness for taxpayers,” said IRS Commissioner Mark W. Everson. “People are entitled to deduct the real cost of operating a vehicle. We’ve responded to the recent gas price increases by making this special adjustment so taxpayers get the tax benefit they deserve.”
Because a decline in prices is expected before the year ends, the IRS will not announce the 2006 rates until closer to January.
Source: IRS (http://www.irs.gov/newsroom/article/0,,id=147423,00.html)
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