For those of you who deduct auto mileage on your tax return there is good news from the IRS.
During the final six months of 2011 taxpayers who use the optional standard rates to deduct travel expenses will get an additional 4.5 cents per mile. Effective July 1, each business mile will be deductible at a rate of 55.5 cents (up from 51 cents).
Some taxpayers choose to use actual expenses on their tax return. The optional standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. Gas prices, depreciation, maintenance, and insurance costs have all increased in recent months.
The new rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents. The rate for providing services to charitable organizations remains at 14 cents a mile.
Coincidently, the same day that this auto mileage rate was increased the Obama administration had decided to release 30 million barrels of oil from the country's emergency reserve as part of a broader international response to rising oil prices. If gasoline prices do retreat the increased mileage deduction will have a more significant impact for business taxpayers.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).