Mileage Rates for Tax Year 2004

IMPORTANT NOTE: Beginning in tax year 2004, taxpayers who use four vehicles or less at the same time for "business" purposes may now use the standard mileage rate. Under prior law, taxpayers using more than one vehicle simultaneously could not use the standard rate at all, which meant they had to deduct actual expenses for each vehicle.

If you use the mileage rate, you may also be able to deduct parking fees, tolls, interest, and state and local taxes (other than gasoline taxes).

The standard mileage rate still CANNOT be used to determine the expenses for automobiles used for hire, such as taxicabs and limousines.

Also, taxpayers may not use the standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after taking any Section 179 deduction for that vehicle.

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