IRS Increases Mileage Rate to 55.5 Cents Per Mile Effective July 1st

The Internal Revenue Service has announced an increase to the optional standard mileage rate for the remainder of 2011. The rate will increase to 55.5 cents per mile for all business miles driven July 1, 2011 through December 31, 2011. This change is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011.

The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The IRS typically updates mileage rates once per year but cited increased gasoline prices as the reason for the mid-year adjustment. Taxpayers have the option of calculating the actual costs of using their vehicle rather than using standard mileage rates.