The Internal Revenue Service announced an increase in the optional standard mileage rates for the final six months of 2011. 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 Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011.
The real question is whether this rate is realistic for the increasing costs we face while using our vehicles for business. The only way to know for sure is to keep track of your expenses and see which method works best.
If you need help in setting up a daily system to keep track of your expenses, let us know, we can help.