The IRS has changed its mind about raising mileage rates.
The agency announced that effective July 1, it’s increasing the standard mileage rate by 4.5 cents, to 55.5 cents per mile, because of rising gas prices.
Yet during a IRS-payroll industry conference call last May 12, a spokesperson from IRS’ Office of Chief Counsel told employers not to expect a mid-year change.
Not only could gas prices decline, she said, but employers complained about the difficulty of implementing the last mid-year change back in 2008.
This time the inconvenience will be even worse, though, because employers received only a week’s notice of these new rates:
Rates effective July 1, 2011 through Dec. 31, 2011
Business — 55.5 cents/mile (previous rate: 51 cents/mile)
Medical/moving — 23.5 cents/mile (previous rate: 19 cents)
Charitable — 14 cents/mile (unchanged from previous rate)
Employers often use IRS’ rate as a benchmark for how much to reimburse employees for business use of their personal vehicles. Payroll must impute to a worker’s taxable income amounts reimbursed above the standard mileage rate.
Check Announcement 2011-40 for more info.
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