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Tax Update: Mileage Rates Changed for 2011

The IRS has enhanced mileage reimbursement rates for the second half of 2011 to 55.5 cents for business and 23.5 cents for medical and moving per mile. This is an increase from the first half rate of 51 cents for business and 19 cents for medical and moving per mile.

The full announcement is below. It's nice to get a little help from our friends at the IRS.

To Your Prosperity,

Kevin Kroskey, CFP

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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 mil

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 (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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