We recently received the following correspondence from the Internal Revenue Service. As a result of this change all businesses using the mileage rates will need to make sure to track the miles for the period 1/1 to 6/30 and 7/1 to 12/31. Just what we all need, more paperwork.
The Internal Revenue Service is revising the optional standard mileage rates
for computing the deductible costs of operating an automobile for business,
medical, or moving expense purposes and for determining the reimbursed amount
of these expenses that is deemed substantiated. This modification results
from recent increases in the price of fuel. The revised standard mileage
rates are 55.5 cents per mile for business use of an automobile and 23.5 cents
for use of an automobile as a medical or moving expense. The mileage rate
for use of an automobile as a charitable contribution is fixed by statute and
remains 14 cents. The revised standard mileage rates apply to deductible
transportation expenses paid or incurred for business, medical, or moving
expense purposes on or after July 1, 2011, and to mileage allowances that are
paid both (1) to an employee on or after July 1, 2011, and (2) for
transportation expenses an employee pays or incurs on or after July 1,
2011.
Announcement 2011-40 will be published in Internal Revenue Bulletin 2011-29
on July 18, 2011.
