Topic 1: IRS Raises Standard Mileage Rate for Second Half of 2011
In response to rising gasoline prices, the IRS has raised the standard mileage rate for business use of an automobile fro 51 cents per mile to 55 ½ cents per mile, effective July 1, 2011. The medical and moving standard mileage rate is increasing 19 cents per mile to 23 ½ cents per mile, also effective on July 1.
The new optional standard mileage rates will apply until superseded by future guidance and can be used by taxpayers to calculate the deductible costs of operating a vehicle. Alternatively, taxpayers can instead use their actual costs, but must maintain adequate records and be able to substantiate their expenses.
The standard mileage rate for services to charitable organizations is set by statute at 14 cents per mile and remains unchanged for the second half of 2011.
It is important to note that taxpayers must be able to substantiate their business mileage for all the above rates.