2004-01-23 CC Meeting - Laserfiche WebLink

Home Browse Search

2004 Standard Mileage Rates Set - 800,000 More Businesses Eligible Page 1 of2 (I Internal Revenue Service OEPARTl1EHT Of THE TREASURY The Digital Daily .!::iQ.ffig :> IhJL~Qyt~rQQ..m The Newsroom 2004 Standard Mileage Rates Set - 800,000 More Businesses Eligible IR-2003-121, Oct. 15,2003 WASHINGTON - The Intemal Revenue Service today released the optional standard mileage rates 10 use for 2004 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. To reduce a recordkeeping burden, the IRS also announced that taxpayers who use no more than four vehicles at the same time for business purposes may use the standard mileage rate, starting in 2004. Currently, those using more than one vehicle at a time cannot use the standard rate at all, leaving them to track the actual expenses for each vehicle. "With this change, more than 800,000 businesses will become eligible to use the standard mileage rate," said IRS Commissioner Mark W. Everson, "This reflects our ongoing interest in reducing the burden for businesses to comply with the tax laws," Although many taxpayers may still ciaim actual vehicle expenses for vanous reasons, the IRS estimates that small businesses will save 8-10 million hours a year in recordkeeping with this expansion of the standard rate option. A taxpayer may not use the standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery Sj'l'cm (MACRS), after claiming a Section 179 deduction for that vehicie, or for any vehicle us,d for hire. Beginning Jan. 1, 2004, the standard mileage rates for the use of a car (including vans, pickups,.llUlllO will be; --- r:-;7.5 cents a mile all business miles driven, up from 36 cents a mile in 2003; ~ when computing deductible medical or moving expenses, up from 12 cents a mile in 2003; and . 14 cents a mile when giving services to a charitable organization. Members of Congress welcomed the change. Senator Olympia J. Snowe of Maine, chair of the Senate Committee on Small Business and Entrepreneurship, said, "I applaud the IRS for adopting this s::nplification measure for small businesses. This change will allow certain small businesses to put a stop to the time- consuming, costly and inconvenient practice of maintaining detailed paper records and, instead, use a simpler, standard mileage rate for business travel expenses when preparing their taxes. The IRS is providing the kind of relief that small business owners critically need: relief that allows them to cut the time spent complying with lax iaws while expanding the time left over to do what they do best, namely running their businesses and creating critical jobs for this economy. t. Rep. Don Manzullo of Illinois, chairman of the House Sm2:1 Business Committee, said, "These changes by the Internal Revenue Service will provi'n odditional needed tax relief to our struggling smail businesses so they can once again Ie: s fo recovery, More than 800,000 small businesses will benefit from these changes. ",:doition to the tax reductions, ywiii.save eight to 10 million hours a year in record-i":','!::[J burdens so that they can now us on their businesses. I congratulate IRS Commissioner Everson for his leadership in making these changes and helping America's small busi: nee,.." Rep. Doug Ose of Calilornia, Chairman of the House Government Reform Subcommittee on http://www.irs.gov/newsroom/article/0..id=114320.OO.html 1/23/2004