IRS Announces new mileage rules

Today, the Internal Revenue Service issued the 2007 mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Starting January 1, 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 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.  As such, the mileage reimbursement has been increased to reflect rising gas prices. Runzheimer International, an independent contractor, conducted the study for the IRS.

See Revenue Procedure 2006-49 for further details.

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