IRS ANNOUNCES INCREASE IN MILEAGE RATES

Following sharp increases in gas prices,  the Internal Revenue Service is revising the optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, or moving expense purposes and for determining the reimbursed amount of these expenses that is deemed substantiated. (The mileage rate for use of an automobile as a charitable contribution is fixed by statute and remains 14 cents.)

The revised standard mileage rates are:

• 55.5 cents per mile for business use of an automobile
• 23.5 cents for use of an automobile as a medical or moving expense.  

The revised rates apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after July 1, 2011, and to mileage allowances that are paid both (1) to an employee on or after July 1, 2011, and (2) for transportation expenses an employee pays or incurs on or after July 1, 2011.  Announcement 2011-40 will be published in Internal Revenue Bulletin 2011-29 on July 18, 2011.

For more information please visit: IRS Newsroom