IRS Boosts Business Mileage Rates July 1, 2011
The Internal Revenue Service has increased the standard business deduction mileage rates for the final six months of 2011 from 51 cents to 55.5 cents per mile, due to rising gasoline prices.
That's good news for business people in spread-out metropolitan areas such as Los Angeles, Phoenix and Dallas-Fort Worth.
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. The rate increase takes effect from July 1 to Dec. 31.
"This year's increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices," IRS Commissioner Doug Shulman said in a statement. "We are taking this step so the reimbursement rate will be fair to taxpayers."
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.