[Update: The IRS recently announced the 2012 mileage rates. The new rates as of January 1, 2012 are 55.5 cents per mile for business miles, 23 cents per mile for medical miles, and 14 cents per mile for charitable mileage. This is virtually unchanged from the July 2011 rates; the only difference is that the medical mileage went down half a cent.]
In response to higher gas prices, the IRS announced that the standard mileage rate for the final six months of 2011 will be increased.
For the first half of 2011, the business rate had been 51 cents per mile. Due to rising gas prices, the rate for the remainder of the year will be 55.5 cents per mile.
The standard mileage rate is normally adjusted just once a year, but when there are large increases in gas prices, the IRS has been known to do a mid-year increase to account for the fact that it costs more to operate your vehicle. The last mid-year increase was in 2008.
People who use their personal vehicles for business use can use either the standard mileage rate or they can deduct the actual costs of operating their automobile.
The rate for medical miles has also been increased for the rest of 2011. The medical rate is going up from 19 cents to 23.5 cents per mile; the charitable rate was not adjusted and will remain the same (14 cents per mile).
While it’s always important to keep track of your miles, it’s even more important to keep accurate and timely records since the mileage rate is increasing in the middle of the year.