The reimbursement rate for federal employees using their own vehicles for official business could rise
in January by three cents per mile from its current 37.5 percent rate, if past practice is followed.
The IRS has announced that a 40.5 percent per mile rate will apply for tax deduction purposes in 2005
and the General Services Administration, which sets the federal employee reimbursement rate, typically
follows the IRS lead. Meanwhile, the IRS announced that the maximum tax-free monthly transit subsidy
will rise from $100 to $105 in 2005. The subsidy is designed to encourage employees to commute via mass
transit and van pools and similar arrangements, but its use varies across the government.
