The Internal Revenue Service has issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 51 cents per mile for business miles driven (includes a 22 cent per mile allocation for depreciation);
- 19 cents per mile driven for medical or moving purposes; and
- 14 cents per mile driven in service of charitable organizations.
The new rates for business, medical and moving purposes are slightly higher than last year’s, reflecting generally higher transportation costs compared to a year ago.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study for the IRS.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously (i.e., a fleet). In a change from past rules, the IRS has said that beginning in 2011 the mileage rate method may be used to figure business vehicle expenses for vehicles used for hire (such as a taxi), provided the business isn’t operating a fleet of vehicles.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.