New Mileage Rates for 2011 July-Dec
The IRS has increased the mileage rate deduction from .51 cents to 55.5 cents per mile beginning July 1, 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business purposes.
The IRS made this special adjustment in recognition of the crazy gas prices that we are all paying at the pump. They normally update and adjust the mileage rates only one time per year~usually announced in the fall for the upcoming calendar year.
The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Mileage Rate Changes
Purpose | Rates 1/1 through 6/30/11 | Rates 7/1 through 12/31/11 |
Business | 51 | 55.5 |
Medical/Moving | 19 | 23.5 |
Charitable | 14 | 14 |