IRS Raises Business, Medical & Moving Standard Mileage Rates
The IRS has recently issued Announcement 2011-40 which provides for mid-year adjustments to the 2011 mileage rates. The rates were changed to reflect the increase in gas prices since last year.
Effective July 1, 2011, the business standard mileage rate will rise to 55.5 cents per mile and the medical/moving mileage rate to 23.5 cents per mile. The charitable standard mileage rate remains at 14 cents per mile for the remainder of 2011.
The standard mileage rate is used by taxpayers to deduct costs of operating vehicles for business purposes. The standard rate is also used by many businesses to reimburse employees for mileage. The moving/medical rates are used to compute deductible costs of operating a vehicle for medical or moving purposes. The charitable mileage rate is used to determine vehicle costs for charitable purposes.
The change in the rates will add some complexity to recordkeeping and accurate logs should be maintained. Use of these rates are subject to certain limitations. Should you or your business need any guidance on these changes, please contact your Marcum Tax Professional.