Business Mileage Rate Increase

The IRS recently announced that the optional mileage allowance for owned or leased autos (including vans, pickups, or panel trucks) will increase by 4.5¢, from 51¢ to 55.5¢ per mile for business travel from July 1, 2011, through December 31, 2011. This increase is to better reflect the real cost of operating an auto in this period of higher gas prices. This rate can also be used by employers to reimburse employees tax-free when employees supply their own autos for business use under an accountable plan and to value personal use of certain low-cost employer-provided vehicles. The rate for using a car to get medical care or in connection with a move that qualifies for the moving expense will also increase by 4.5¢ for the last half of 2011, from 19¢ to 23.5¢ per mile.