Business standard mileage and other rates increase for 2011

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.

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