WASHINGTON – July 5, 2011 – Who says the IRS has no heart? Proving they have at least a little one, the IRS looked at the recent sky-high price of gasoline and decided to increase the optional standard business mileage deduction rate from 51- to 55.5-cents-per-mile for the July through December half of the 2011 tax year.
According to IRS “Announcement 2011-40,” the increased deduction rate of 55.5-cents-per-mile will apply to miles driven for business purposes between July 1, 2011, and Dec. 31, 2011. For the first half of the year – Jan. 1, 2011, through June 30, 2011 – the lower rate of 51-cents-per-mile must be used.
The mileage deduction rate for miles driven for medical and moving purposes is also being increased from 19 to 23.5-cents per mile for the July 1, 2011 to Dec. 31 period. The current deduction rate for miles driven for charitable purposes remains unchanged at 14-cents-per-mile.
“This year’s increased gas prices are having a major impact on individual Americans,” said IRS Commissioner Doug Shulman in a press release. “The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices. We are taking this step so the reimbursement rate will be fair to taxpayers.”
In making the announcement, the IRS also reminded taxpayers that instead of the optional business standard mileage rates, they can also calculate their vehicle-use deduction based the actual costs of using the vehicle.
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