The IRS has released the optional standard mileage rates for 2012, which look very similar to the rates established for the second half of 2011.

Beginning Jan 1, 2012, the standard mileage rates for the business use of a car (including vans, pickups or panel trucks) will be: :

• 55.5 cents per mile for business miles driven;
• 23 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service of charitable organizations.

The rates for business miles driven and for miles driven in service of a charitable organization remain unchanged from the second half of 2011. Meanwhile, the rate for using a business automobile for medical or moving purposes decreases by 5 cents per mile. Annual rate changes are based on a yearly study of the fixed and variable costs of operating an automobile, conducted by Runzheimer International, an independent contractor.

The IRS sets new mileage rates at the beginning of each year. Occasionally, under certain circumstances, the IRS will release mid-year rate changes. For example, they raised the mileage rates during the middle of 2005, 2008, and 2011 following spikes in the price of fuel.

"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 in a press release. "We are taking this step so the reimbursement rate will be fair to taxpayers."

IRS mileage rates are the maximum per-mile amount that taxpayers can deduct for business use of a personal vehicle. Many organizations use the standard mileage rate to govern how much they will reimburse employees for business miles driven. As long as the reimbursement is at or below the mileage rate, it will not count as income to the employee.

IRS Announcement 2012-01 contains additional information and limitations on the use of the standard mileage rates.

The rates for past years from 2001 to the present are also listed below.

During the second half of 2011, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) were:

• 55.5 cents per mile for all business miles driven;
• 23.5 cents per mile when computing deductible medical or moving expenses; and
• 14 cents a mile when giving services to a charitable organization.