The Internal Revenue Service announced Thursday it will increase the optional standard mileage rate, which taxpayers use to calculate the deductable costs of operating an automobile for business, for the final six months of 2011 – a move that is expected to provide a boost to mobile small businesses facing high gas prices.
Continue Reading Below
The 4.5-cent increase, to 55.5 cents a mile, for all business miles driven will be effective on July 1 through the remainder of the year.
"This year's increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices," said IRS Commissioner Doug Shulman. "We are taking this step so the reimbursement rate will be fair to taxpayers."
Taxpayers have the option of using the business standard mileage rate instead of calculating actual costs. The government and many businesses use the rate to reimburse their employees for mileage.