Mileage rate changes on July 1...
The IRS is changing the mileage rate effective for the last six months of 2011 (July 1st through December 31st).
This means that taxpayers who claim the mileage deduction will need to track how many miles they travel for business the first six months separately from the number of miles they travel the last six months.
The mileage rate for the first six months is 51 cents per mile. The rate beginning in July is 55.5 cents per mile.
If computing the deduction for medical miles or moving miles, the rate changes from 19 cents to 23.5 cents per mile. Both rates are increasing by 4.5 cents per mile.
The rate for providing services for charitable organizations is still 14 cents per mile and does not change, because it is set by statute and not by the IRS.
For the full article from the IRS, go to http://content.govdelivery.com/bulletins/gd/USIRS-96907
This is going to impact Tax Software providers and Accountants as well.
I recommend that accountants send out notices to taxpayers (either email or snail-mail) alerting them to this change; especially if they have used a mileage deduction on a prior year return.
Posted by Phil Drake, Drake Software