The Blau Company, Ltd. :: Tempe, Arizona

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Excerpt from "Life & Taxes Blog"
Aaron's chronicle of how the IRS and Tax Court affect taxpayers' daily lives.

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IRS Releases 2011 Mileage Rates

The IRS released the mileage allowance rates for business travel.

For 2011, the rate for using a vehicle in connection with business, the rate is $.51 per mile, an increase of $.01 from 2010 rates. The mileage deduction is meant to replace the following expenses: lease payments or depreciation, maintenance, repairs, tires, gas, oil, insurance, license and registration fees. You may still claim separate deductions for parking fees and tolls.

There are instances where you may not use the standard mileage rate. Please contact a tax professional for more details.

For those of you who are eligible to use it, the standard mileage rate offers several advantages.

Users do not need to keep a record of actual expenses or retain receipts. A record of time, place, business purpose and number of miles suffices.
If an auto's business expenses are deducted via the mileage rate, it is not subject to the Code Sec. 280F dollar caps or the special rules that apply if qualified business use does not exceed 50% of total use.
The mileage rate method may yield bigger deductions than the actual expense method for a thrifty, high-mileage model.

There may be some disadvantages to using the mileage rate, which includes a potentially smaller deduction than would be obtained from actual expenses for some vehicles.

For those that use a vehicle for medical care or in connection to qualified moving expenses, the deduction is $.19 per mile. The rate for charitable mileage will be $.14 per mile.

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