Despite the fact that gas pump prices appear to be approaching the trajectory of a perfect slam dunk by your favorite college B-Ball player, the IRS issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes with only a modest increase from the 2010 rates.
Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
• Business Miles Driven: $.51 per mile
• Medical or Moving Purposes Driven; $.19 per mile
• Charitable Organization Service Driven: $.14 per mile
An annual study of the fixed and variable costs of operating a vehicle are factored into the calculation of the standard mileage rate for business.
Some cautions to stay out of trouble with the IRS:
• If you used any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or claimed a Section 179 deduction for that vehicle, you may not use the standard mileage rate.
• If the taxpayer used more than four vehicles simultaneously, the standard mileage rate deduction cannot be used. This provision is currently under review; the IRS is inviting commentary from businesses.
Something new in 2011, a taxpayer may use the business standard mileage rate for vehicles used for hire, such as taxicabs or car services.
And lastly, falling in the “I did not know this” category, taxpayers have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
If you need more information on the IRS standard mileage deduction, Revenue Procedure 2010-51 and Notice 2010-88 contain additional details.
