11/16/2003
IRS Issues Changes Regarding Standard Mileage Rate for Business Use of Automobiles
by Laura Fine, Assistant State Director
The IRS has increased the standard mileage rate for business use of an automobile from 36 cents a mile to 37.5 cents a mile. The new rate becomes effective January 1, 2004. The IRS has also released (Rev. Proc. 2003-76; IRB 2003-43) the optional standard mileage rates to use in 2004 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. The standard mileage rate applies to cars, vans, pickups, and panel trucks. For deductible medical and moving purposes, the rate has increased from 12 to 14 cents per mile. For charitable purposes it remains at 14 cents per mile.
The revenue procedure also changes the rules under which the standard mileage method can be used. In the past, if you used more than one vehicle at a time in your business, you had to use the actual expense method. (For example, you're a sole proprietorship with two vehicles. If both vehicles are in use at the same time, the standard mileage method is not available. For 2004, you can have up to four vehicles in use at the same time and still use the standard mileage method.
The IRS estimates that more than 800,000 businesses will become eligible to use the standard mileage rate and that small businesses will save an estimated 8 to 10 million hours a year in recordkeeping burdens.
For additional information visit the IRS website at:
http://www.irs.gov/newsroom/article/0,,id=114320,00.html.
Recent | 2007 | 2006 | 2005 | 2004 | 2003
Subscribe right now to our FREE
bi-monthly E-News service!
You will receive articles two full weeks before they appear on the Arkansas SBDC web site!
