The IRS has increased the standard mileage rate to 55.5 cents per mile for business miles driven from July 1, 2011, through December 31, 2011. The standard mileage rate is an optional rate that taxpayers can use to calculate their deduction for the cost of using an automobile for business purposes instead of tracking their actual costs. Small businesses also use this rate when reimbursing employees for business travel.
The IRS usually sets the standard mileage rate annually but decided to make this special adjustment for the second half of 2011 because of the recent increases in gasoline prices. The rate is 4.5 cents higher than the 51 cent rate that was in effect for the first six months of 2011. For more information, go to the IRS website at www.irs.gov.