Update: Information for the IRS mileage rate 2016 is here. This article is about the 2011 mileage rates published by the IRS.
When deducting eligible automobile expenses, taxpayers have the option of deducting actual expenses or using the optional standard mileage rates to deduct automotive expenses. Because, the records required in order to deduct the actual expenses and depreciation of a car expenses are extensive and detailed, most people opt to use the standard mileage deduction.
In addition, many businesses use the standard IRS mileage rates to reimburse employees for miles driven for work purposes. This both ensures that the company can deduct those reimbursements fully as a business expense, and that there is no disagreement about what the mileage reimbursement rate should be since an impartial government agency is the one that sets it.
The mileage deduction rate is adjusted every year. The standard 2011 tax deduction mileage rate has been published.
Standard IRS 2011 Mileage Rates
Beginning on January 1st, 2011, the standard mileage rates for calculating the deductible costs of operating a car or truck for business purposes is 51 cents per mile. Remember that although you cannot deduct the cost of commuting to a job, you can take a small business deduction for miles driven for the business.
The standard mileage deduction for deducting moving expenses is 19 cents per mile. The mileage rate for 2011 for medical expenses deductions is also 19 cents per mile.
The 2011 standard mileage rate for miles driven in service of eligible charitable organizations is 14 cents per mile.
Remember that to claim any deduction for miles driven you must have detailed contemporaneous records. That means that you need to keep a log of all miles driven and that the log must be updated as the car is used, not at a later date. To meet the IRS rules for deducting miles driven for business purposes, simply record the beginning and ending mileage as well as the date for all business trips or other deductible miles driven.
If you want to take it a step further, change the color of the pen ink every so often as a way to “demonstrate” that the log was indeed compiled over many different time periods. (It isn’t “proof”, but it does look good if you ever have to argue that your mileage records are legitimate.)
New 2011 Mileage Rate Rules
Beginning in 2011, people can use the standard business mileage rate for vehicles that are hired such as taxicabs and limousines. However, remember that you must record all such mileage with contemporaneous records just like regular mileage deductions.
IRS Mileage Rate 2011 Second Half
Due to higher gas prices in 2011, the IRS increased the standard mileage deduction rate in 2011 to 55.5 cents for the final six months of the year.