Higher gas prices mean higher employee expenses


Your company uses the optional standard mileage rate issued by the IRS to calculate expense reimbursements for driving. With gas prices on the rise, can you raise the amount that is reimbursed for mileage?


Yes, in recognition of recent gasoline price increases, the IRS made a special adjustment for the final months of 2011. The IRS normally updates the mileage rates once per year in the fall for the next calendar year.

The rate increased to 55.5 cents per mile for all business miles driven from July 1, 2011, through December 31, 2011. This is an increase of 4.5 cents from the 51-cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

"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."

Source: IR-2011-69, June 23, 2011.

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