IRS Increases Deductible Mileage Rates July 1
Gas prices have made it difficult for many Americans across the country to afford transportation costs, prompting some to cut back on other necessary expenses, such as groceries and utilities. In response to the rising fuel costs, the Internal Revenue Service announced it will increase the standard gas mileage rates for the remaining six months of the year.
The tax agency will increase the standard gas mileage rate by 4.5 cents to 55.5 cents per mile, which will go into effect on July 1, 2011, and remain in place until December 31, 2011. Individuals who use their personal vehicles for business purposes, as well as other taxpayers who are eligible for mileage deductions, may benefit from this increase during filing season.
Americans who claim mileage expenses for medical or relocation costs will be able to claim 23.5 cents per mile for the latter half of the year, as opposed to the standard 19 cents. However, the mileage rate changes will hold steady at 14 cents for the charitable category.
Good recordkeeping practices are required to document your deductible mileage, and separate it from commuting and personal mileage. Be sure to document this mileage by keeping a log or other written record.