On June 23, 2011, the Internal Revenue Service (“IRS”) issued Announcement 2011-40, 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 are deemed substantiated.
The revised standard mileage rates are:
- Business - 55.5 cents per mile
- Medical and Moving - 23.5 cents per mile
These new rates apply to deductible transportation expenses incurred on or after July 1, 2011, and to mileage allowances that are both paid to an employee on or after July 1, 2011 and paid or incurred by the employee on or after July 1, 2011.
For 2011 transportation costs incurred prior to July 1, 2011 the following rates, as prescribed in IRS Notice 2010-88, continue to apply:
- Business - 51 cents per mile
- Medical and Moving - 19 cents per mile
The mileage rate that applies to the deduction for charitable contributions remains at 14 cents per mile for all of 2011.
The mileage rate increases for the remainder of 2011 reflect the recent increases in the price of gasoline. The IRS normally updates the mileage rates only once a year.
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