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Thursday, June 23, 2011

The Montana State Fund Decreases Its Workers Compensation Insurance Rates

The Montana State Fund (MSF) Board of Directors has adopted an overall average decrease of twenty percent for premium rates effective July 1, 2011.  Rates may differ as individual class codes can vary up or down each year from the prior year rates, depending on the average losses for all the businesses in the class code.  The new rates apply to any policy with an effective date in Policy Year 2012 (July1 ,2011 to July 1, 2012).
House Bill 334 (HB334) enacted by the 2011 Montana Legislature is expected to significantly reduce workers' compensation costs.  Most of the provisions in that legislation become effective for injuries that occur July 1, 2011 and later.

For more information please contact our office or visit the Montana State Fund website at montanastatefund.com

IRS Increases Mileage Rate to 55.5 Cents per Mile

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

Business Rate increases from 51 cents to 55.5 cents
Medical/Moving increases from 19 cents to 23.5 cents

Charitable rates stays at 14 cents.

For additional information please contact our office or visit the IRS website at http://www.irs.gov/.