IRS mid-year rate increase. Usually, when I hear the term rate increase, I cringe, but this latest one is actually a good thing. The IRS has announced a mid-year increase to the standard mileage rates for tax purposes. They typically revise the mileage rates only once a year, but Congress has been pressuring them to increase the mileage rates in light of the significant increase in the cost of gasoline.
The standard mileage rate for business use of your automobile increases 4.5 cents from 51 cents per mile to 55.5 cents per mile for business miles driven from July 1, 2011 through December 31, 2011. For the period from January 1, 2011 through June 30, 2011 the rate remains 51 cents per mile.
It is interesting to note that this is the first increase in the standard mileage rate since 2008. In both 2009 and 2010 the rate actually decreased. The new rate is only one half of a cent higher than the 2009 rate and is three cents below the 2008 rate. In case you’ve forgotten the average price of gasoline hit an all time high of $4.11 per gallon in 2008. I didn’t remember either. How soon we forget!
The new rate for use of your vehicle related to medical or moving expenses is 23.5 cents per mile, also an increase of 4.5 cents per mile. The rate for charitable purposes remains 14 cents per mile since it is set by statute.
Here is a breakdown of the 2011 rate changes:
…January – June Rate: 51 cents
…July – December Rate: 55.5 cents
…January – June Rate: 19 cents
…July – December Rate: 23.5 cents