Standard Mileage Rate Set for 2011

The IRS announced the standard mileage rates for use a vehicle for certain purposes in 2011.

• For business driving, the rate is 51¢ per mile, up slightly from 50¢ per mile in 2010. This rate can be used by employers to reimburse employees under an accountable plan, eliminating the need to substantiate the cost of the business driving.
• For medical and moving, the rate is 19¢ per mile (up from 16.5¢ per mile in 2010).
• For charitable driving, the rate remains at 14¢; this rate is fixed by law and is not adjusted annually by the IRS.

When a vehicle used for business driving is owned, rather than leased, the deemed depreciation rate for 2011 is 22¢ per mile (down from 23¢ per mile in 2010). For example, if a self-employed individual drives her personal car for business 10,000 miles in 2011, she must reduce the basis of the vehicle by the deemed depreciation amount of $2,200 (10,000 miles x 22¢).

Caution: If the price of gasoline rises dramatically, the IRS could increase the mileage rates for a portion of the year, as it did in 2008.

Source: IR-2010-119