NEW YORK (MainStreet) — Drivers will get a break next year as the Internal Revenue Service has announced an increase in the standard tax deductions for business-, medical- and moving-related use of a vehicle.
In Revenue Procedure 2010-51, the IRS sets new standard rates for the use of a car, van, pickup or panel truck that will begin in the 2011 tax year. Drivers will be entitled to deduct:
- 51 cents per mile driven for business purposes
- 19 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
The business rate is up 1 cent from 2010, and the medical and moving rate is up 2.5 cents. In both 2009 and 2010 the business, medical and moving rates dropped.
The IRS bases the standard mileage rate for business, medical and moving purposes on the variable costs of auto maintenance as determined by an annual study conducted by Runzheimer International.
The standard mileage allowance for charitable driving is set by Congress, and has been at 14 cents per mile since 1998, with a temporary increase in 2005 and 2006 allowed for mileage related to Hurricane Katrina.
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