IRS Raises Mileage Reimbursement Rate

The Internal Revenue Service announced on September 9, 2005 that the optional standard mileage rates for the final four months of 2005 will be 48.5 cents.  This is an 8 cent per mile increase for all business miles driven between September 1, 2005 and December 31, 2005.

The IRS normally sets mileage rates only once a year - in the fall - effective for the next calendar year.  This special adjustment marks only the second time in a decade that the IRS has changed the rate within a year.

The mileage rates for medical or moving expenses was also raised in IRS Announcement 2005-41.   As of September 1, 2005, the new four-month rate for computing deductible medical or moving expenses is 22 cents per mile, up from 15 cents per mile for the first eight months of 2005.

The rate charitable organizations will use is set by statute, not the IRS, and remains at 14 cents per mile.