Just in time for a summer respite, the IRS has raised the standard mileage rate for business use of an automobile from 51 cents per mile to 55 ½ per mile, effective July 1 (Announcement 2011-40). The medical and moving standard mileage rate is increasing to 23 ½ per mile, also on July 1.
The new optional standard mileage rates will apply until superseded by future guidance and can be used by taxpayers to calculate the deductible costs of operating an automobile. Alternately, taxpayers can instead use their actual costs, but must maintain adequate records and be able to substantiate their expenses.
The standard mileage rate for services to charitable organizations is set by statute at 14 cents per mile and remains unchanged by Thursday’s announcement. The former rates announced in Notice 2010-88 (51 cents per mile for business use, 19 cents per mile for medical and moving expenses) continue to apply to expenses incurred before July 1, 2011.
For additional information or assistance in your tax planning matters, please contact Dennis Nelson @ (816) 741-7700 or a MarksNelson tax advisor.