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WooHoo Mileage Rate Increases to 55.5 Cents for Last 6 Months of Year
Katherman Kitts & Co. LLP Mileage Rates Update
WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.
The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 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.
In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2011. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.
“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.”
While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.
The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.
The new rates are contained in Announcement 2011-40 on the optional standard mileage rates.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Mileage Rate Changes
| Purpose | Rates 1/1 through 6/30/11 | Rates 7/1 through 12/31/11 |
| Business | 51 | 55.5 |
| Medical/Moving | 19 | 23.5 |
| Charitable | 14 | 14 |
Related articles
- Standard Mileage Rates (whiteheadcpas.wordpress.com)
- Representatives ask IRS for mid-year hike of standard mileage rates (dontmesswithtaxes.typepad.com)
- IRS not likely to bump up optional standard mileage deduction rates … yet (dontmesswithtaxes.typepad.com)
Is Stripping An Art Form or An Obscenity – Kelly Phillips Erb Explains The Tax Connection
Is stripping an art form
By Stacie Kitts CPA
These days I rarely have time to do anything that doesn’t directly involve running my accounting firm. But Kelly – also known as the TaxGirl ® penned an article that caught my eye Strip Club Doesn’t Meet “Bare Minimum” in Court. Punny huh?!
In fact, it so entertained me that I had to change gears to tell you about it. I admit it, even I think tax is a dry subject for a blog. But there is that rare story that entertains.
The fundamental question posed in Kelly’s post – Is exotic dancing an art form?
It turns out that in the state of New York, since 1965, sales taxes are imposed on the fees paid by patrons at strip clubs. However, Nite Moves, an adult club in Latham, New York, begs to differ with the state’s interpretation of adult and exotic dances. The club was audited in 2005 by the New York Division of Taxation and told to remit nearly $125,000 in unpaid sales tax – plus interest – for fees paid for door charges and private dances (if you have Tina Turner’s “Private Dancer” song in your head now, you’re not the only one). But Nite Moves claims that the assessment was in error. They believe that the fees paid should be exempt from sales tax and appealed.
In its argument, Nite Moves cited Tax Law § 1105 (f)(1) which exempts:
Any admission charge … except charges for admission to race tracks, boxing, sparring or wrestling matches or exhibitions which charges are taxed under any other law of this state, or dramatic or musical arts performances, or live circus performances, or motion picture theaters, and except charges to a patron for admission to, or use of, facilities for sporting activities in which such patron is to be a participant, such as bowling alleys and swimming pools.
(Emphasis added)
In other words, they believe that fees for lap dances should be exempt just as fees for the ballet.
The court ultimately disagreed. They concluded that the club didn’t provide enough evidence that would prove that the “private dances offered in the club were choreographed performances.” The club simply didn’t successfully sell the court on their argument that stripping is an art form.
I don’t know, swinging around on a pole – upside down secured by a single limb – plus, some of those girls are really bendy and have some pretty impressive acrobatic skills. (What? I’ve seen Striptease – you know with Demi Moore) Seems to me that there is some skill involved, some artistic expression…and shall I say it, even some talent. I think, yes, I think I might have been able to sell that in court….but that’s just me.
Related articles
- Exotic dance, artistic performance: tomato, tomahto, taxes (dontmesswithtaxes.typepad.com)
- NY court says strip club’s lap dances are taxable (boston.com)
- NY court says strip club’s lap dances are taxable (msnbc.msn.com)
- NY court says strip club’s lap dances are taxable (msnbc.msn.com)
- NY court says strip club’s lap dances are taxable (hosted.ap.org)
- Lap dancers take it on chin from N.Y. court (cbsnews.com)
Stacie's Tax Stuff 