IRS Mileage Rate Increase

The Wall Street Journal:

The Internal Revenue Service said it will raise its standard optional mileage rates, but those increases will be effective only for the last six months of this year.

This is important news for many drivers who use their cars and other vehicles for work, medical or moving purposes. It’s also important because the optional business standard mileage rate is used as a benchmark by the federal government and many businesses to reimburse employees for mileage.

There are two ways to figure the deductible costs of using your car. You can deduct the actual expenses of using your vehicle, assuming you kept good records. Or you can use the IRS’s standard mileage rates.

The IRS rate will rise to 58.5 cents a mile for business miles driven from July 1 through Dec. 31 of this year. That’s up eight cents from 50.5 cents a mile for the first six months of this year.

The IRS said it made the changes to reflect surging gasoline prices.

“Rising gas prices are having a major impact on individual Americans,” IRS Commissioner Doug Shulman says. The IRS is adjusting the standard mileage rates “to better reflect the real cost of operating an automobile.”

Photo by nickobec.

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