[Peepers]

"It costs me how much to drive my car...I thought I just paid for gas??" -- conventional un-wisdom
____________________

http://money.cnn.com/2005/09/10/pf/taxe ... /index.htm

IRS raises auto mileage rate
Tax collector says higher gasoline prices boost per-mile rate to 48.5 cents; 2006 rate delayed
September 10, 2005: 6:30 PM EDT

WASHINGTON (Reuters) - The Internal Revenue Service has increased a mileage rate used to compute the deductible costs of operating an automobile for business due to the sharp rise in gasoline prices.

It also delayed setting the 2006 rate, saying gas prices may decline before the start of the new year.

"This is about fairness for taxpayers," said IRS Commissioner Mark Everson. "People are entitled to deduct the real cost of operating a vehicle. We've responded to the recent gas price increases by making this special adjustment so taxpayers get the tax benefit they deserve."

The tax-collecting agency boosted the optional standard mileage rate to 48.5 cents a mile for all business miles driven in the last four months of 2005, up 8 cents from the rate used so far this year.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of the extra burden of tracking actual costs. This rate is also used as a benchmark by the U.S. Government and some businesses to reimburse employees for mileage.

The IRS normally updates mileage rates once a year in the fall for the next calendar year. But it said it would delay setting the 2006 rate until nearer to January because gas prices could decline over the next few months.

Gas prices have soared above $3 a gallon and far higher in some places because of a sudden drop in supplies following Hurricane Katrina.

END

[frankthetank]

I wonder how many millions it cost them to come to this conclusion.

[basil_hayden]

As per usual, something doesn't make sense.

We should all become sole proprietors of small businesses, with every meeting a transaction, enabling the claiming of all travel expenses, hehe.

We're taxed something like 57 cents (fed and state) a gallon, and can claim 48.5 cents per gallon and get an average of 20 miles per gallon or so. We'd make like $5 per gallon profit with the average used car.

No wonder the government's broke.

[FrankRichards]

$this->bbcode_second_pass_quote('basil_hayden', 'A')s per usual, something doesn't make sense.
We're taxed something like 57 cents (fed and state) a gallon, and can claim 48.5 cents per gallon and get an average of 20 miles per gallon or so. We'd make like $5 per gallon profit with the average used car.

[basil_hayden]

And that would be my point, Frank. If I drive my $5K POS for 1000 gallons or 20,000 miles, and it's all legally claimable mileage, I can claim $9,700.00. After paying $3,000 for gas, $500 for insurance and $500 for maintenance for a year, I still have my $5K POS and $5,700.00. The government on got $570, but they're paying out $5700.

[lawnchair]

The only way you could get "free money" out of it is if you are getting mileage voucher because you are driving for the feds/state/etc. Other small business drivers get it as a tax-deduction, lowering their taxable income, but likely at a 15% tax rate, only "getting" 15% of this figure.

I know lots of people who estimate $500 of repairs on their older cars. But, if you add it up, it's usually a lot more than that. Plus, you still have depreciation... you'll probably need another $5k car every 4-5 years (100,000 miles), so tack on another $1000 to the cost of driving. Add in some tolls and parking. Maybe a ticket?

Driving good used cars (and having a good driving record) is seriously cheaper than the AAA/government figures. But, it's still going to be 35c/mile or more. And that doesn't come close to the real costs of driving: police costs and medical care (insurance cost) not needed without automobiles, highway construction paid for from general tax revenue, cost of parking lots included in purchases and lost wages...

Not that I don't drive, but I do think about the 40cents to 1$+ per mile I'm really spending. Most people don't.

[Peepers]

^That was the point of my message, the actual cost of driving, not to get off on a sidetrack about the validity of the tax deducation or government overall. Ask ten people how much it cost them to drive to work that day and they'll start and end by calculating how much gas they probably used.

[chuck6877]

Question: I don't drive any for my job, but of course I DRIVE TO WORK.

Can I count the miles I drive to work and back home for this deduction??

Thank you,
Chuck

[I_Like_Plants]

Jane Holtz Kay has some great stuff on her website and in her book Asphalt Nation about the costs of driving, they're huge.

As an example, Los Angeles is 2/3 given over to the car. 2/3 of the space in Los Angeles is roads, parking, etc. Imagine that small garden plots instead. Try, it may not be easy, since we're programmed to never think of that.

[Doly]

$this->bbcode_second_pass_quote('I_Like_Plants', '
')As an example, Los Angeles is 2/3 given over to the car. 2/3 of the space in Los Angeles is roads, parking, etc.

[nocar]

$this->bbcode_second_pass_quote('', 'A')s an example, Los Angeles is 2/3 given over to the car. 2/3 of the space in Los Angeles is roads, parking, etc. Imagine that small garden plots instead.

[dub_scratch]

$this->bbcode_second_pass_quote('I_Like_Plants', '
')As an example, Los Angeles is 2/3 given over to the car. 2/3 of the space in Los Angeles is roads, parking, etc.