Mileage rates increased mid-year

The IRS has announced that the optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) will increase from 51 cents to 55.5 cents per mile for business travel. The increase took effect on July 1, 2011. The new rate is intended to better reflect the real cost of operating an auto due to rising gas prices.

The rate can also be used by employers to provide tax-free reimbursements under an accountable plan to employees who supply their own autos for business use. It can also be used to value the personal use of certain low-cost, employer-provided vehicles.

The rate for using a car to obtain medical care or in connection with a move that qualifies for the moving expense deduction will increase from 19 cents to 23.5 cents per mile.

More information is available in Information Release 2011-69 and Announcement 2011-40.

 
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