2011 Mileage Rates Announced

The IRS recently announced the 2011 mileage rates for business, medical, and charitable purposes.  The rate for business miles increased from 50 to 51 cents, medical and moving, increased from 16.5 to 19 cents, and charitable miles remain unchanged at 14 cents per mile.

The mileage rates are based on an annual study performed by Runzheimer International.  The study determines the cost of operating an automobile, and based on that amount we get the standard rates.

If you’re thinking that this wasn’t much of an increase, you’re right.  However, considering that we went from 55 cents in 2009 to 50 cents per business mile in 2010, I’m okay with the minor increase.

One quick tip: using the standard mileage rate isn’t always better. You get a choice (imagine that!) of using the standard rate or using your actual automobile expenses. Sometimes, the latter can amount to more of a deduction that using the standard rate. It, however, requires that you actually keep track of your expenses (repairs, insurance, gas, oil, registration fees, lease payments, etc.). Taking the standard deduction is easier, but sometimes a little hard work will pay off.  If you’re driving for business purposes, you should be keeping track of those expenses anyway.

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