IRS has announced that the optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) is 51¢ per mile for business travel after 2010. That’s 1¢ more than the 50¢ allowance for business mileage during 2010. Further, the 2011 rate for using a car to get medical care or in connection with a move that qualifies for the moving expense deduction is 19¢ per mile, 2.5¢ more per mile than the 16.5¢ for 2010.
The standard mileage rate may not be used for a purchased auto if:
- it was previously depreciated using a method other than straight-line for its estimated useful life
- a Code Sec. 179 expense deduction was claimed for the auto
- the taxpayer has claimed the additional first-year depreciation allowance
- the taxpayer depreciated it using MACRS under Code Sec. 168
- the deductible expenses of five or more autos owned or leased by a taxpayer and used simultaneously (such as in fleet operations).
- Rural mail carriers who receive qualified reimbursements also can’t use the standard mileage rate
A taxpayer who uses the mileage allowance method for an auto he owns may switch in a later year to deducting the business connected portion of actual expenses, so long as he depreciates it from that point on using straight line depreciation over the auto’s remaining life.