The Internal Revenue Service has responded to the nationwide increase in gas prices by raising the mileage rate by 4.5 cents. Starting July 1, drivers will be able to deduct 55.5 cents per mile for the business-related travel they undertake in their private vehicle. Generally, the IRS announces increases in the fall; however, just as in 2008, high gas prices have led the IRS to increase the mileage rate in the middle of the year.
Along with business-related travel, the mileage rate for medical and moving expenses has increased to 23.5 cents per mile – an increase from the 19 cent deduction previously accorded to drivers. According to the Oil Price Information Service, gasoline consumed 9.5% of taxpayers’ median income in May of 2011, this is only slightly less than the 10.2% of consumers’ income gasoline consumed back in 2008.
Even if you haven’t deducted these costs in the past, many employers use the IRS mileage amount to determine how much to reimburse employees for their business related fuel costs.
The business mileage deduction is just one of many deductions available to taxpayers. Let the attorneys at Kohler & Smith Co., LPA help you and your family at tax time – call (614) 888-4911 today.