"Drivers who ordinarily use the standard mileage rate to calculate automobile business expenses can offset the soaring costs of gasoline by switching to deductible automobile expenses," said Eric Hayes, Senior Tax Analyst for Petz Enterprises, Inc, whose on-line tax preparation brand TaxBrain.com is the third largest tax service in the U.S.

"If the standard mileage rate was first used when the vehicle was placed into service --used for business -- then the taxpayer may convert to the actual expense deduction to offset higher fuel cost for the current year. From September 1, 2005 through December 31, 2005 the IRS increased the standard to 48.5 cents per mile. Despite the increase in the standard mileage rate, one should carefully weigh which expense -- actual or standard --they should use for their 2005 return," explained Mr. Hayes.

"When gas was reasonably inexpensive, many people simply took the standard deduction," Mr. Hayes said. "But at more than three dollars a gallon, anyone who uses their car for business - real estate agents, independent taxi operators, salespeople - are advised to take a closer look at their expenses. It could be in their best interest to use actual expenses, leading to bigger deductions.

"Now in its fifth consecutive season, TaxBrain.com has experienced more than 75% growth of online tax preparation and filing by small businesses. Because many small businesses are based on vehicle usage, the increased deduction is even more important this year," Mr. Hayes concluded.

Mileage Deductible Increased 20% by IRS For Last Four Months of 2005

For automobile business usage during the first eight months of 2005, the standard mileage rate is 40.5 cents. From September 1 through December 31, 2005, the rate is boosted to 48.5 cents. If in previous years the standard rate was selected, then the new rate can be applied. If deductible auto expenses included vehicle depreciation in the first year the vehicle was put into service, the taxpayer cannot use standard mileage rate in the sequent years of the vehicle's life.

In addition to the mileage for business vehicle users, actual allowable deductible auto expenses include interest expense on loan or lease payments of the vehicle, tires, oil changes and other maintenance such as new/rebuilt engine, or transmission, and even car washings.