SELF IMPROVEMENT

Irs Mileage Rate
Recently, the Internal Revenue Service announced an increase in the standard mileage rate taxpayers can claim for the last six months of 2011. Beginning July 1 the rate for business miles increased to 55.5 cents from 51 cents and 23.5 cents from 19 cents per mile for medical and moving expenses. Per-mile deduction for charitable expenses remains unchanged at 14 cents.

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"Higher prices of gas this year have a major impact on individual Americans," IRS Commissioner Douglas Shulman said that "the IRS is adjusting the standard mileage rates to better reflect [this]."

Business standard mileage rate is used by many taxpayers to deduct the cost of using a machine in a business instead of tracking actual costs. The rate is also used as a benchmark by the federal government and many businesses to pay employees for mileage.

Given the increasing price of gas is why the rate for charitable expenses so low? Unlike other rates, it is by Congress since 1984. Lawmakers passed the 14-percent discount in 1998 and has not changed since then. At this point, and for several years after the charitable deduction exceeded the discounted per-mile for moving and medical expenses (10 cents) and nearly half of the discount business (32.5 cents).

Now the 14-percent support charitable mileage rate remains medical / moving of 23.5 cents and is about a quarter of the rate for business miles. In his push for tax simplification, the American Institute of CPAs again urged Congress to allow the IRS mileage rates all in place and make medical, moving, and prices of the same charities. The AICPA's proposal requires that the three non-business mileage rates are a fixed percentage (at least 50% and up to 70%) of the business mileage rate.

Labant said Melissa, an assistant with the AICPA tax, "With these changes, taxpayers will not need more than three different mileage rates in a return to use