The IRS released Announcement 2011-40 that increases the optional standard mileage rates due to recent gasoline prices. Effective July 1, 2011 through December 31, 2011, the new six-month rate for computing deductible business, medical, and moving expenses will increase by 4.5 cents.
| Type of Reimbursement | 1/1/11 – 6/30/11 | Effective 7/1/11 |
| Business Mileage | 51 cents per mile | 55.5 cents per mile |
| Medical & Moving Mileage | 19 cents per mile | 23.5 cents per mile |
As a reminder, the use of a personal automobile to obtain medical care may be a deductible medical expense if primarily for, and essential to, medical care. This mileage is an eligible health flexible spending account (FSA) expense, and employers may include mileage as an eligible expense under their health reimbursement arrangement (HRA). The new mileage rate is for eligible expenses paid or incurred on or after July 1, 2011.
For additional information regarding the standard mileage rate increases, visit the IRS website at http://www.irs.gov/pub/irs-drop/a-11-40.pdf.