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MSJC > Public Information & Marketing Office > IRS increases mileage rate

IRS increases mileage rate

06/23/2011
Sent on Behalf of the MSJC Business Services Office:
 
The Internal Revenue Service has increased the mileage rate for the last six months of the calendar year.  The new rate is 55.5 cents per mile effective July 1, 2011.
 
The form on the P drive has been changed to reflect the new reimbursement rate and is labeled with the tag of “July 2011”.
 
If you have any questions please contact the Business Office.
  
 

IR-2011-69: IRS Increases Mileage Rate to 55.5 Cents per Mile

Internal Revenue Service (IRS) sent this bulletin on 06/23/2011 11:53 AM EDT
 
 
IRS Newswire
June 23, 2011
 

News Essentials


 

The Newsroom Topics


 

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Issue Number:    IR-2011-69

Inside This Issue


 
IRS Increases Mileage Rate to 55.5 Cents per Mile 
WASHINGTON — The Internal Revenue Service today 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

 
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