The recent spike in gasoline prices has prompted the IRS to revise standard mileage rates for calculating certain deductible transportation expenses.  The new rates apply to deductible costs of operating a vehicle for business, medical or moving purposes incurred on July 1, 2011 and through the end of the year.  There is no change to the mileage rate for an automobile used for charity.  The revised standard mileage rates are:

• 55.5 cents per mile for business use of an automobile
• 23.5 cents per mile for use of an automobile as a medical or moving expense

Standard mileage rates effective for January 1 – June 30, 2011 are 51 cents per mile for business use of a vehicle and 19 cents per mile for medical or moving purposes.  The standard mileage rate remains at 14 cents per mile driven in service of charitable organizations.

Taxpayers may compute their deductible transportation costs by using either the standard mileage rate method or the actual expense method.