Not much new happened in 2005 and there won't be much different about 2006. Some of the more prevalent changes are highlighted below.

Uniform definition of a child for purposes of determining the dependency exemption, head of household filing status, the earned income credit, the child tax credit and the credit for daycare expenses. In the past each of these had their own definition of 'child' and sometimes they were at odds with one another. Now a four part test applies to each. To qualify as a child the individual must meet the age, relationship, support and residency tests. Overall this is a good thing since it makes the job of tax return preparers a little easier.

Mileage rates increased as usual but this year the spike in gas prices following Katrina got the Service's attention and they temporarily propped up rates even higher. The result is that 2005 has two mileage rates, those before August 31 and those after. Before August 31 the mileage rate for business use was 40.5 cents per mile. After August 31 it rose to 48.5 cents per mile. Similar increases were put into effect for charitable miles related to providing Katrina relief.

For 2006 the mileage rates are 44.5, 14 and 18 cents per mile for business, charitable and medical mileage respectively.

The push for alternative fuel vehicles was also cheered on by IRS with the elimination of the 50% reduction in the credit for electric and clean fuel vehicles.

You can read the full take from IRS here.

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