Mileage Rates for Tax Year 2005

NOTE: 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 "business" standard mileage rate CANNOT be used if:

• You are using FIVE or more vehicles at the same time, such as in fleet operations,

• You use the vehicle for "hire". For example, a taxicab or limousine,

• You claimed depreciation on the vehicle, other than straight-line depreciation such as MACRS (Modified Accelerated Cost Recovery System) or ACRS,

• You claimed any Internal Revenue Code Section 179 deduction on the vehicle, OR

• You claimed bonus depreciation (special depreciation allowance) on the vehicle.

*Hurricane Katrina Charitable Mileage Rate Deduction

The mileage rate individuals may use to compute a tax deduction for personal vehicle expenses associated with charitable work is statutory and has not been increased since 1997. For a taxpayer providing relief related to Hurricane Katrina, the "Katrina Emergency Tax Relief Act of 2005" sets the charitable mileage rate at 70% of the standard business mileage rounded up to the next highest cent.

From August 25 to August 31, 2005: $0.405 X 70% = $0.29

From September 1 to December 31, 2005: $0.485 X 70% = $0.34

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