Tax Deductions 2011-2012: IRS Raises Mileage Rates by 4.5 Cents

  • Beginning July 1, drivers can deduct 55.5 cents per mile for using their private vehicle for business-related travel.
  • The new mileage rate for deducting medical and moving expenses is 23.5 cents per mile, up 4.5 cents from 19 cents.
  • These mileage rates are also used by the government and many companies as a benchmark to determine how much to reimburse their employees for fuel costs, the IRS said. The costs that are reimbursed by an employer don’t have to be reported as income for tax purposes, unless they exceed the IRS’s payment limit.