2011 Standard Mileage Rates – Rates 7/1 through 12/31/11 – IRS mileage

The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

Purpose Rates 1/1 through 6/30/11 Rates 7/1 through 12/31/11
Business 51 55.5
Medical/Moving 19 23.5
Charitable 14 14

Optional Standard Mileage Rates – after July 1, 2011

Optional Standard Mileage Rates – Announcement 2011-40
This announcement informs taxpayers that the Internal Revenue Service is modifying
Notice 2010-88, 2010-51 I.R.B. 882, by revising the optional standard mileage rates for
computing the deductible costs of operating an automobile for business, medical, or moving
expense purposes and for determining the reimbursed amount of these expenses that is
deemed substantiated. This modification results from recent increases in the price of fuel.

The revised standard mileage rates are:
(1) Business 55.5 cents per mile
(2) Medical and moving 23.5 cents per mile
The mileage rate that applies to the deduction for charitable contributions is fixed under
§ 170(i) of the Internal Revenue Code at 14 cents per mile.

The revised standard mileage rates set forth in this announcement apply to deductible
transportation expenses paid or incurred for business, medical, or moving expense purposes
on or after July 1, 2011, and to mileage allowances that are paid both

(1) to an employee on or after July 1, 2011, and

(2) for transportation expenses paid or incurred by the employee on or
after July 1, 2011.

The standard mileage rates set forth in Notice 2010-88 continue to apply to deductible
transportation expenses paid or incurred for business, medical, or moving expense purposes
before July 1, 2011, and to mileage allowances paid

(1) to an employee before July 1, 2011, or

(2) with respect to transportation expenses paid or incurred by the employee before July 1,
2011.

All other provisions of Notice 2010-88 remain in effect.

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IRS Increases Mileage Rate to 55.5 Cents per Mile – Rates 7/1 through 12/31/11

The Internal Revenue Service announced an increase in the optional standard mileage rates for the final six months of 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.

The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2011. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

“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,” said IRS Commissioner Doug Shulman. “We are taking this step so the reimbursement rate will be fair to taxpayers.”

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The new rates are contained in Announcement 2011-40 on the optional standard mileage rates.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes

Purpose Rates 1/1 through 6/30/11 Rates 7/1 through 12/31/11
Business 51 55.5
Medical/Moving 19 23.5
Charitable 14 14

2011 Standard Mileage Rates – Rates 1/1 through 6/30/11

Internal Revenue Service issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

  • 51 cents per mile for business miles driven
  • 19 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

2011 Standard Mileage Rates Table

Applicable Period Rates (in cents per mile) IRS Source
2011
Business 51
Charitable 14
Medical and moving 19
IR-2010-88

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. The IRS is requesting public comments on whether taxpayers should be allowed to use the business standard mileage rate in this circumstance.

Beginning in 2011, a taxpayer may use the business standard mileage rate for vehicles used for hire, such as taxicabs.

Also beginning in 2011, the standard mileage rates are announced in a separate notice, which also provides the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate and the maximum standard automobile cost for automobiles under a FAVR allowance.  The IRS plans to discontinue publishing the standard mileage rate revenue procedure annually but will publish modifications as required.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2010-51 and Notice 2010-88 contain additional details regarding the standard mileage rates.

Read more on IRS website

Mileage Rate Changes

Purpose Rates 1/1 through 6/30/11 Rates 7/1 through 12/31/11
Business 51 55.5
Medical/Moving 19 23.5
Charitable 14 14