Due to the extreme rise in gas prices, the IRS announced that they have decided to increase the standard business mileage rate from .51 cents per mile to .555 cents per mile. This increased deduction can only be applied to miles that were driven between July 1, 2011 and December 31, 2011. The first half of the year, the lower rate must be used.

The IRS Announcement 2011-40 will also apply to the miles that are driven for medical and moving purposes. This mileage increase will be raised to .235 cents a mile from .19 cents a mile. Miles driven for charitable purposes will remain the same, .14 cents a mile.

According to the IRS Commissioner Doug Shulman, This years increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices. We are taking this step so the reimbursement rate will be fair to taxpayers.

The IRS would also like to remind taxpayers that they can calculate their vehicle-use deduction based on the actual costs of using the vehicle.