I filled up my car this weekend and was pleased to see that the pump price at my local station had come down a few pennies.
And that's exactly why the IRS isn't too keen on adjusting its 2011 optional standard mileage deduction rates right now.
These rates — for business, medical and moving related driving — typically are adjusted for inflation and other costs of car ownership each fall. Tax deductions also are allowed for charitable driving, but that rate of 14 cents per mile is set by law and not annually adjusted.
Back in 2008, when gas nudged the $4 per gallon mark, the IRS bumped up the rates for the last half of that tax year.
A group of U.S. Representatives has asked the IRS to consider doing that again for 2011.
An IRS spokeswoman, however, says don't get your hopes up.
During a May 12 payroll industry conference call, Ligeia Donis, Assistant Branch Chief with the IRS Office of Chief Counsel, said the agency has no current plans to increase the current standard mileage rate of 51 cents per mile for business travel.
Donis offered two reasons for IRS mileage rate hesitancy:
- Gas prices could decline, as my anecdotal experience shows.
- Employers don't really want the hassle of dealing with a mid-year rate change.
"Changing the rate in middle of the year could present logistical challenges," said Donis. "And if the price of gas dropped, there would be more complications."
Specifically, said Donis, the IRS got some feedback from employers that the change was difficult to implement when it was adjusted three years ago.
Of course, things change.
A recent Associated Press-GfK poll found that more than 40 percent of Americans say increases in gasoline prices will cause serious financial hardship for them or their families in the next six months. That concern was four percentage points greater than in March.
Overall, 71 percent of the poll respondents said they expect higher gas prices to pose some sort of financial hardship in the coming months.
If that public perception and gas prices hold steady or increase, the IRS could relent.
But right now, it looks like all of us who drive for business and other activities that can be deducted are going to have to deal with high gasoline prices on our own.
Related posts:
- Representatives ask IRS for mid-year mileage rate hikes
- Gas prices are rising. Will the IRS hike its standard mileage rate
to match them? - Per-mile tax taken for a brief test drive
- Mileage tax deduction rates for tax years 2010 and 2011
- $4 gas prompts increase in IRS mileage rates (2008)
- Corporate mileage rate variations
- Hitting the highway with Uncle Sam's help
- Brakes applied to mileage tax
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Discount Code
I was thinking some days back that may be the oil prices in my territory are high but now I can say that oil prices are high and are becoming high and high in every part of the world.
Major Medical Health
I figured we would see a 10% increase to about 55 cents and maybe 60 cents next year when gas goes above $4 bucks a gallon again.
I hope they don’t go up but with the demand in other parts of the world, I think it’s inevitable.
Body Kits
Oil prices are getting down now days after the end of Qadaffi in Libya.