Keeping up to date with the standard mileage rate is important for me as a business lawyer because I often drive to meetings, as well as for my small business clients in San Jose and all over Silicon Valley who will be using that rate to figure out their tax deduction for miles driven in the operation of their businesses. In addition, it is also usually the rate at which businesses agree to reimburse their employees for miles driven while on the job. The IRS has confirmed that the standard mileage rate for the use of business vehicles in 2012 will remain the same as it was for the final six months of 2011, at 55.5 cents per mile (which was higher than the previous 51 cents in early 2011). The mileage rate for medical and moving expenses actually goes down by half a cent to 23 cents per mile, but the mileage rate used when driving for charity is still unchanged at 14 cents per mile.
401(k) Contribution Amount:
Another small but important change is the maximum 401(k) contribution amount, which goes up this year from $16,500 to $17,000 for 2012, with taxpayers born before 1963 being able to put in as much as $22,500.