NEW YORK (CNNMoney) -- Drivers will soon be able to get back an additional 4.5 cents per mile that they rack up for business purposes thanks to a new Internal Revenue Service rule announced Thursday. The rare mid-year decision was fueled by the recent rise in gas prices.
Beginning July 1, drivers can deduct 55.5 cents per mile for using their private vehicle for business-related travel. The new mileage rate for deducting medical and moving expenses is 23.5 cents per mile, up 4.5 cents from 19 cents.
These increases are typically announced during the fall of every year (the last time the agency boosted mileage rates mid-year was in 2008), but the IRS said gas prices have had such an impact on consumers that it needed to act sooner.
"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 statement. "We are taking this step so the reimbursement rate will be fair to taxpayers."
Gas prices have been on a tear this year, now averaging $3.61 a gallon -- after closing in on $4 earlier in the year, according to AAA's daily survey of gas prices. This has led to declines in the stock market, price hikes at retailers and less discretionary spending by consumers.
Nationwide, drivers spent $392.57 on gasoline last month, which was 9.5% of the median income, according to the Oil Price Information Service. At its peak three years ago, gas accounted for 10.2% of consumer's income.
Acknowledging the problem, and in an effort to offset surging oil prices in the aftermath of Libyan supply disruptions, the Department of Energy announced Thursday it will tap 30 million barrels of oil from its Strategic Petroleum Reserve. And many consumers hope this will alleviate some of the pain at the pump in coming months.
But while the high prices persist, taxpayers will at least get a little help when it comes time to do their taxes next April. All those miles and pennies definitely add up: In 2008, taxpayers deducted $32 billion in business-related fuel costs, the IRS said.
These mileage rates are also used by the government and many companies as a benchmark to determine how much to reimburse their employees for fuel costs, the IRS said. The costs that are reimbursed by an employer don't have to be reported as income for tax purposes, unless they exceed the IRS's payment limit.
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
Carlos Rodriguez is trying to rid himself of $15,000 in credit card debt, while paying his mortgage and saving for his son's college education.
Susan Carson and Laura DeLallo make $225,000 and have half a million in retirement savings, but their sprawling portfolios is proving hard to manage.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.60%||3.68%|
|15 yr fixed||2.73%||2.79%|
|30 yr refi||3.64%||3.72%|
|15 yr refi||2.77%||2.82%|
Today's featured rates: