Mileage Rate May Increase

The rate at which the government reimburses employees for using personal vehicles for traveling on official business may increase soon as a result of a recent IRS move to raise the mileage rate for certain tax deductibility purposes. The IRS rate increased from 50.5 cents per mile to 58.5 cents per mile effective July 1-December 31; the federal employee mileage rate is set by GSA and typically tracks the IRS deductibility rate, although there often is a lag time of several weeks or even months between an IRS action and a GSA action. The last time rates were increased in mid-year due to rising fuel prices was 2005. GSA already has said it will increase from 19 to 27 cents a mile the reimbursement rate for employees during relocations, reflecting another change made by the IRS.