The Washington Post

IRS bumps up mileage deductions

The Internal Revenue Service jumped in last week to try to help ease the burden of high gas prices, announcing that it would raise the optional mileage deduction for the last six months of the year.

Gas prices have frustrated U.S. consumers and threatened a fragile economy.

The rate for taxpayers who use their automobiles for business will be bumped up to 55.5 cents a mile from July 1 through Dec. 31, resulting in an increase of 4.5 cents.

The IRS usually updates the rates once a year — in the fall — for the next calendar year, but said it made last week’s move to help taxpayers.

“This year’s increased gas prices are having a major impact on individual Americans,” said IRS Commissioner Doug Shulman. “We are taking this step so the reimbursement rate will be fair to taxpayers.”

The price of gas, which had exceeded $4 a gallon, recently began to drop. That move was helped along by the Obama administration’s decision — along with other nations — to tap into oil reserves to help ease prices at the pump.

The IRS mileage bump could also impact the federal workforce. The U.S. government often uses the rate as a benchmark when reimbursing its employees for qualified automobile travel.

The new six-month rate for medical and moving expenses will also jump by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first half of 2011, the IRS said.

The reimbursement rate for travel for charitable work is not set by the IRS, and remains at 14 cents a mile, the agency said.


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