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Last month, the IRS released the optional standard mileage rates to use for 2005 when computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes.
Beginning Jan. 1, 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
- 14 cents a mile when providing services to a charitable organization
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. The study is conducted by an independent contractor. (The charitable standard mileage rate is set by law.)
The three-cent increase in the business mileage rate was the largest one-year rise ever and was based on higher vehicle and fuel costs recorded during the year ending September 2004.
Vehicle Depreciation vs. Mileage Deduction
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method allowed 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.
For more information on standard mileage rates and other tax issues, visit the IRS Web site at www.irs.gov. For information about business use of a car, click here.
'PRO Builder: Business Planning' Available at BuilderBooks.com
“PRO Builder: Business Planning,” available through BuilderBooks.com, spells out the benefits of preparing business plans and provides proven methods for establishing goals, developing strategies, setting priorities and evaluating results. The publication includes step-by-step exercises and an electronic spreadsheet to help you develop a customized plan for your business. To view or purchase this publication online, click here, or call 800-223-2665 to order.
NAHB Has More Than 170 Resources to Help You Run Your Business More Profitably
Go to NAHB's Business Management Tools Web pages for instant access to more than 170 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.
Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.
Local and state home builders associations can link directly to www.nahb.org/biztools from your Web site and give your members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance they need to succeed.
The NAHB University of Housing Offers Courses on Business Management
The NAHB University of Housing offers a course on business management designed to help builders improve their business and profitability. For a list of current offerings, click here.
Subscribe to NAHB’s Business of Building e/Source
NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, click here on the members only side of www.nahb.org.
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