New Mileage Rates for IRS 2011

August 31, 2011 — Leave a comment

On June 23, 2011, the IRS announced an increase in optional standard mileage rates for the remainder of 2011. Taxpayers can use the optional standard rate to deduct costs of operating an automobile or other vehicle for business and other purposes. For every mile driven, 55.5 cents will be deducted, increasing from the 51-cent rate that was effective in the first half of 2011. This increase in deductible costs are a result of increased gasoline prices in the past months. IRS Commissioner, Doug Shulman, said “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.” While gasoline plays a significant role in mileage, items such as depreciation and insurance, as well as other fixed and variable costs can be evaluated into the mileage rates.

On top of the business miles driven, mileage rates have increased for moving and medical expenses. The rate increased to 23.5 cents per mile, up from the 19-cent rate the first half of 2011. The deductible rate for charitable organizations has remained the same at 14 cents per mile.

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