2011 Standard Mileage Rates from the IRS and Reimbursement Tips

As of January 1, 2011, the Internal Revenue Service (IRS) set the standard mileage deduction rate. Though there were no surprises, it’s always good for both employers and employees who use cars for work purposes to remember the rules for compliance.
The optional standard mileage rates are as follows:
  • 51 cents a mile for automobiles and light trucks
  • 19 cents per mile for medical or moving purposes
  • 14 cents per mile
Here are some other helpful tips when it comes to mileage rates and reimbursement:
  • Please note the IRS will not allow the use of the standard mileage rate if more than four vehicles are used by a person or business.
  •  There are two methods of claiming mileage expenses.
    • You can use the actual costs of operating the vehicle (which includes fuel, insurance repairs, maintenance, etc.) and keep track of each of these costs.
    • You can elect the standard mileage allowance (which is what most people and small businesses do for tax purposes).
  •  Records to show the beginning and ending mileage for each trip (and any applicable notes) should be taken. You must record this information at the time of your travel and not at the end of the year. The person claiming the deductions must keep the records.
Some employers give workers an auto allowance, which is a fixed monthly rate that is paid each month. If you choose that option for your employees, the IRS considers this additional income, so the employer and employee must treat this as taxable wages. For business owners, this should be treated as a distribution of income or taxable wages.
Click here to view the IRS document that includes the changes to the 2011 rates.
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Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on IRS documents and mileage rates. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.