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IRS Transportation Expenses

(Monthly Transportation Standards)
Updated January, 2004

Ownership Costs
  First Car Second Car
National $450 $326

Operating Costs & Public Transportation Costs
  No Car One Car Two Cars
Northeast Region     $225 $298 $393
    New York $296 $365 $461
    Philadelphia $231 $291 $386
    Boston $254 $301 $398
    Pittsburgh $159 $296 $390
 
Midwest Region $192 $259 $354
    Chicago $254 $325 $420
    Detroit $311 $381 $477
    Milwaukee $211 $239 $334
    Minn.-St.Paul $271 $309 $404
    Cleveland $194 $290 $383
    Cincinnati $219 $285 $380
    St. Louis $197 $275 $370
    Kansas City $244 $280 $375
 
South Region $194 $235 $330
  Washington, D.C. $284 $333 $430
    Baltimore $221 $268 $364
    Atlanta $283 $252 $346
    Miami $279 $336 $431
    Tampa $252 $255 $352
   Dallas-Ft. Worth $308 $335 $430
    Houston $273 $355 $449
 
West Region $243 $307 $402
    Los Angeles $270 $374 $471
    San Francisco $318 $391 $486
    San Diego $302 $305 $403
    Portland $186 $258 $352
    Seattle $257 $339 $434
    Honolulu $287 $311 $405
    Anchorage $305 $357 $453
    Phoenix $270 $359 $454
    Denver $307 $344 $439
* Does not include personal property taxes.

The data for the Operating Costs section of the Transportation Standards are provided by Census Region and Metropolitan Statistical Area (MSA). The following table lists the states that comprise each Census Region. Once the taxpayer’s Census Region has been ascertained, to determine if an MSA standard is applicable, use the definitions below to see if the taxpayer lives within an MSA (MSAs are defined by county and city, where applicable). If the taxpayer does not reside in an MSA, use the regional standard.

Why are these amounts important? Once again, they are of prime importance if you are considering submitting an Offer in Compromise. Since the IRS began using these Monthly Standards in September, 1995, I have had very few clients that actually spend more than the allowed amounts for Operating Costs. The IRS *MAY* ask for proof of what you actually spend, but my experience has been that they allow the amounts listed and usually do not ask for verification. You do have to prove the amounts you claim for Ownership Costs (purchase or lease). If you are spending more than the allowed amount, you will only be able to claim the maximum listed ($489 per vehicle). For example, if you are spending $550 on a car payment, the amount we can claim is only $489. If you are spending $250, we claim $250, the actual amount spent.

If you need to know what Counties make up the Metropolitan Areas in which you live, I have them listed here. I also have the list of what states make up the various Regions. However, if you live in California & haven’t figured out that you are in the West Region, I’m afraid your taxes are only a small part of the problem!