In recognition of recent gasoline price increases, the Internal Revenue Service has increased the optional standard mileage rates for the final six months of 2011. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.

The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through December 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

The new six month 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 for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Purpose Rates 1/1/11 through 6/30/11 Rates 7/1/11 through 12/31/11 Business 51 55.5 Medical/Moving 19 23.5 Charitable 14 14

Circular 230 Notice: If this communication contains tax advice, this advice was not intended to be used, and cannot be relied upon by anyone, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.