Due to a significant increase in gas prices, the Internal Revenue Service announced that the optional standard mileage rates will increase for business purposes from 51 cents to 55.5 cents a mile until Dec. 31, 2011.
Rates for computing medical and moving mileage rates have also increased by 4.5 cents, up to 23.5 cents a mile from 19.
“We are taking this step so the reimbursement rate will be fair to taxpayers,” said IRS Commissioner Doug Shulman. Normally, the IRS re-assesses mileage rates once a year in the fall.
These optional standard rates are used to calculate deductible costs of operating automobiles for business and other purposes.
Because the mileage rate for charitable organizations is set by law, it will remain fixed at 14 cents per mile.
Taxpayers can always compute the mileage deductions using their vehicle, rather than the standard mileage rates.