Mileage Rates Rise Due to High Gas Prices

Mileage Rates Rise Due to High Gas Prices
Do you drive a car, truck or van for work? If so, it's important to note that as of July 1, you're able to get an additional 4.5 cents per mile.

Businesses = 55.5 cents per mile driven (up from 51 cents through June)
Medical or moving = 23.5 cents per mile driven (up from 19 cents through June)
The Internal Revenue Service (IRS) increased the mileage rate in response to the recent high gas prices. These mileage rates are used to calculate deductible costs for driving an automobile for business, medical and moving purposes.

NOTE: The rate for driving that is related to charities remains unchanged at 14 cents per mile, since that rate is set by a statute.

Make Sure You Qualify
Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

Additional Option
Although the IRS provides the standard mileage rate for ease and convenience, you're not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.

Remember – if you have questions or concerns, talk to a tax consultant or accountant to discuss your options and unique situation. You can read the official release in the IRS' Announcement 2011-40.

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