[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.

Related Posts:

• IRS Announces Mileage Rates for 2009
• Standard Mileage Rate for 2011
• Standard Mileage Rates To Go Down In 2010

In the second half of 2008, the IRS increased the standard mileage rate to 58.5 cents per mile from 50.5 cents per mile for people who use their personal car for business use.  This was in response to skyrocketing gas prices earlier in the year.

Since then, gas prices have dropped dramatically.  Prices were as high as $4.10 in some states during the summertime, but have dropped to a national average of $1.90 in this last week in November.

I was wondering how the IRS would respond to the drop in prices.  After all the increase to 58.5 cents per gallon was based on prices that were twice as high as they are now.

Earlier this week, the IRS announced that the standard mileage rate for business use of your automobile in 2009 will be 55 cents per mile.  That’s still well above the beginning rate in 2008, so I think the new rate is very generous.

For home and online business owners who use their car for business purposes, the automobile deduction can really add up.  Make sure you keep a log of all of your business related trips, including the date, the total miles driven and the purpose of the trip.

You can find travel or mileage logs in any office supply store, or you can use your calendar or a spreadsheet to keep track of your miles.  The most important thing is to keep good and accurate records in case you are ever audited.

If you keep track of your mileage for medical or charity purposes, not that the standard mileage rate for medical purposes is 24 cents per mile, and the rate for charitable purposes is 14 cents per mile.

For more information on the new mileage rates, please visit ‘IRS Announced 2009 Standard Mileage Rates’.

Related Posts:

• IRS Announces Mid-Year Standard Mileage Rate Increase
• Standard Mileage Rate for 2011
• Standard Mileage Rates To Go Down In 2010