1.  What are standard mileage rates?

2.  What are the standard mileage rates for 2007?

3.  Are there times in filing a return that I should not use the standard rate?

4.  Where can I get additional information?

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1.  What are standard mileage rates?

The Internal Revenue Service determines a standard mileage rate each year.  This is the cost per mile that can be used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.  Many companies also use this standard rate for reimbursements to employees for using their own vehicles when conducting company business.

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 used by the IRS to set the 2007 rates.  The mileage rate for charitable miles is set by statute.

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2.  What are the standard mileage rates for 2007?

Beginning Jan. 1, 2007, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) is:

• 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 2007 rate for business miles compares to a rate of 44.5 cents per mile for 2006.  The 2007 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. 

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3.  Are there times in filing a return that I should not use the standard rate?

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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4.  Where can I get additional information?