Friday, June 24, 2011

IRS Standard Mileage Rates goes up July 1...

We have been waiting for this! The high cost at the gas pump prompted the Internal Revenue Service to adjust the standard mileage rate for the second half of the year.

The standard mileage rate is used by taxpayers to determine the tax deduction without tracking actual costs to operate a vehicle. It also is used by the federal government and many businesses to determine the reimbursement rate for employee mileage.

The IRS announced Thursday the rate for business miles will increase by 4.5 cents. Taxpayers will calculate mileage driven from January through June at 51 cents a mile and miles driven July through December at 55.5 cents.

The IRS announced Thursday that the standard business mileage rate is increasing for the second half of the year. The Obama administration said the U.S. will tap into strategic gas reserves in an effort to lower the price at the pump. Considering the next presidential election is roughly a year away, this move was not unexpected!

The mileage rate for moving and medical travel will increase by 4.5 cents to 23.5 cents a mile. Mileage for charitable work will remain at 14 cents a mile.