IRS boosts mileage rate as gas prices rise

09/13/2005

September 13, 2005 (AP)—The IRS might not have a reputation as a sweetheart, but it’s being kinder to driving workers than many employers are.

As gas prices crossed the $3-a-gallon mark, the agency upped its mileage reimbursement rate from 40.5 cents a mile to 48.5 cents a mile, until the end of this year. That’s what workers can deduct from their taxes if they have to cover their own car expenses at work.

Companies routinely tie reimbursement rates to the IRS figure, but not this time. Only 5.9 percent of firms said they’ll follow this raise, in a survey of its 200,000 members by the Society for Human Resource Management, a professional association based in Alexandria, Va.; 8.6 percent said they’re either offering telecommuting or organizing carpools.

About 80 percent said they have no plans to change their policies.