Mileage Reimbursment Rate Raised by the IRS - by Vicky Collins
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Mileage reimbursement rate raised by IRS
By Vicky Collins Submitted by: DSWA
Great News! The Internal Revenue Service announced on September 9, that is has raised the standard mileage reimbursement rate from 40.5 cents to 48.5 cents per mile. This is the single largest increase ever and has been issued due to the surge in gasoline prices over the past year. The new rate will apply to business travel from September 1st through the end of this year.
Direct sellers, other home-based business owners and employees who use their vehicles for business can deduct their actual expenses or the standard mileage rate on tax returns. The federal government and many private employers use the IRS rate when reimbursing workers who use their car on the job.
The bigger deduction is particularly good news for direct sellers, who traditionally drive many miles each year for their business. The new rate still probably falls short of the actual cost. Direct sellers are reporting costs as much as $100 or more to fill their Yukons and Suburbans. Still, the increase is quite helpful and it makes keeping the mileage log even more important since miles driven after September 1st will provide a greater tax deduction than miles driven prior to September 1st.
Besides business-related travel, the IRS also raised the mileage rate for deductible medical or moving expenses from 15 cents to 22 cents a mile. That new rate also applies for the last four months of this year. The mileage rate for those who volunteer at charities is set by Congress and remains at 14 cents per mile.
Traditionally, the IRS sets the rate each fall for the following year. The new rate for 2006 will not be announced until later this year. IRS said it would wait to see if the predictions that gas prices will drop dramatically prior to year-end come to pass. If so, expect a lower rate for 2006.
Vicki Collins is the Prosperity Center Director for the DSWA, a CPA/CCPS and a Certified Public Accountant. She specializes in helping direct sellers keep more of what they earn by managing their money properly and maximizing home-business deductions.
Print The use of Learning Center material is granted only to DSWA members for non-commercial purposes and must be accompanied by the author's name and the following byline. Article provided by the Direct Selling Women's Alliance Copyright 2003
CLICK HERE TO JOIN THE DSWA TODAY!
By Vicky Collins Submitted by: DSWA
Great News! The Internal Revenue Service announced on September 9, that is has raised the standard mileage reimbursement rate from 40.5 cents to 48.5 cents per mile. This is the single largest increase ever and has been issued due to the surge in gasoline prices over the past year. The new rate will apply to business travel from September 1st through the end of this year.
Direct sellers, other home-based business owners and employees who use their vehicles for business can deduct their actual expenses or the standard mileage rate on tax returns. The federal government and many private employers use the IRS rate when reimbursing workers who use their car on the job.
The bigger deduction is particularly good news for direct sellers, who traditionally drive many miles each year for their business. The new rate still probably falls short of the actual cost. Direct sellers are reporting costs as much as $100 or more to fill their Yukons and Suburbans. Still, the increase is quite helpful and it makes keeping the mileage log even more important since miles driven after September 1st will provide a greater tax deduction than miles driven prior to September 1st.
Besides business-related travel, the IRS also raised the mileage rate for deductible medical or moving expenses from 15 cents to 22 cents a mile. That new rate also applies for the last four months of this year. The mileage rate for those who volunteer at charities is set by Congress and remains at 14 cents per mile.
Traditionally, the IRS sets the rate each fall for the following year. The new rate for 2006 will not be announced until later this year. IRS said it would wait to see if the predictions that gas prices will drop dramatically prior to year-end come to pass. If so, expect a lower rate for 2006.
Vicki Collins is the Prosperity Center Director for the DSWA, a CPA/CCPS and a Certified Public Accountant. She specializes in helping direct sellers keep more of what they earn by managing their money properly and maximizing home-business deductions.
Print The use of Learning Center material is granted only to DSWA members for non-commercial purposes and must be accompanied by the author's name and the following byline. Article provided by the Direct Selling Women's Alliance Copyright 2003
CLICK HERE TO JOIN THE DSWA TODAY!
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