Wednesday, June 29, 2011

Good News, Business Owners: The IRS Is Upping Your Mileage Rate

While the IRS typically sets mileage rates prior to the start of the year, this year’s extraordinary rise in gasoline prices has prompted the agency to issue a mid-year revision. Said IRS Commissioner Doug Stone, “This year’s increased gas prices are having a major impact on individual Americans. 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.”

If you use a vehicle for business purposes and deduct annual mileage, we’ve got some good news for you: effective July 1, the Internal Revenue Service is raising the standard mileage allowance from 51 cents per mile (applicable for miles driven from January 1 to June 30) to 55.5 cents per mile. The rate for miles driven for medical or moving expenses jumps from 19 cents per mile to 23.5 cents per mile, but the rate for charitable work stays at 14 cents per mile.


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