WASHINGTON — The Internal Revenue Service released last month the optional standard mileage rates to use for 2005 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. Beginning Jan. 1, 2005, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be: 40.5 cents a mile for all business miles driven, up from 37.5 cents a mile in 2004; 15 cents a mile when computing deductible medical or moving expenses, up from 14 cents a mile in 2004; and 14 cents a mile when giving services to a charitable organization. The 3-cent increase in the business mileage rate was the largest one-year rise ever. The primary reasons were higher prices for vehicles and fuel during the year ending in September. The charitable standard mileage rate is set by law. 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. An independent contractor, Runzheimer International, conducted the study for the IRS.
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