Last month, the Internal Revenue Service issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business.
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. This is a reduction from the 2010 rate of 50 cents per mile but still well under the 2009 rate of 55 cents per mile. The mileage rate for 2011 reflect generally higher transportation costs compared to a year ago. It is based on an annual study of the fixed and variable costs of operating an automobile.
If gasoline prices keep rising as they have in the past month or so, we may see a mid-year adjustment to this rate like we saw in 2008 where the rate was 50.5 cents per mile for the first half of the year and 58.5 cents per mile for the second half.