Move to Raise IRS' Mileage Reimbursement Formula

Senator Norm Coleman (R-Minnesota) has requested that the IRS increase the mileage reimbursement rate (currently $0.505 per mile) to reflect the sudden and dramatic increase in fuel costs. This rate typically adjusts on an annual basis, however, there is some precedent for interium adjustments such as the 4 months following Hurricane Katrina.

"For many Americans, using a car for business purposes is not an option but a necessity," Coleman said in a statement. "As gas prices hit record levels, immediately increasing this year's standard mileage rates is more important than ever. Doing so will provide small businesses and working Americans with an important measure of relief."

The cost of gasoline has risen nearly 30% since November 2007 when the rate was last adjusted. The cost of gasoline is the largest factor in the establishment of the reimbursement rate, along with maintenance, depreciation, and insurance.

Nanny employers typically rely on the IRS rate to calculate reimbursement to the nanny when she either transports her charges or runs family errands using her personal automobile.