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Claim Your Free Copy of Overtime Primer: Highlights from the New Regulations

The federal DOL overtime regulations go into effect this year. Are you ready?

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This report includes a summary of key changes, including the salary level test and salary basis test.

As a bonus, we've included a handy flowchart to help you determine exemption status under the FLSA.

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October 16, 2003
IRS Sets Standard Mileage Rates for 2004
The Internal Revenue Service has released its optional standard mileage rates for automobile reimbursement for 2004.

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The rates apply 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."

Beginning Jan. 1, 2004, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) will be:

  • 37.5 cents a mile for all business miles driven, up from 36 cents a mile in 2003;
  • 14 cents a mile 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.

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 primary reason for the mileage rate increases is the rise in fuel prices during the study period, which ended on June 30. The charitable standard mileage rate is set by law.

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