WASHINGTON — 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;
- 20 cents per mile driven for medical or moving purposes; and
- 14 cents per mile driven in service to a charitable organization.
The new rate for business miles compares to a
rate of 44.5 cents per mile for 2006. The new rate for medical
and moving purposes compares to 18 cents in 2006. The primary
reasons for the higher rates were higher prices for vehicles and
fuel during the year ending in October.
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.
A taxpayer may not use the business standard
mileage rate for a vehicle after using any depreciation method
under the Modified Accelerated Cost Recovery System (MACRS), after
claiming a Section 179 deduction for that vehicle, for any vehicle
used for hire or for more than four vehicles used simultaneously.
Revenue Procedure 2006-49 contains additional information on these
standard mileage rates.
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