WASHINGTON - The Internal Revenue Service has increased the per diem rate for drivers to $59 per day effective Jan. 1.

This is the daily standard allowance a driver can be reimbursed while away from home for meals and incidental expenses. To claim the deduction, a driver must save all meal and incidental receipts or use the daily standard allowance.

The per diem rate had been $52 for the past few years.

The daily standard allowance is set annually by the IRS. The standard allowance is a percentage of the allowed per diem amount published annually by the IRS.

Of the current $59 per day, the driver is allowed to deduct 80 percent of his/her income. Proof of time away from home (drivers log book is acceptable) is all that is required.

For more information on the increase, go to IRS revenue bulletin dated October 19, 2009, at www.irs.gov/irb/2009-42_IRB/ar09.html.

The IRS also has announced that the allowable mileage deduction for the business use of small vehicles will be 50 cents a mile this year, down from 2009s 55 cents.

The allowance extends to the business use of autos, vans, pick-up trucks, and panel trucks.

Actual vehicle expenses are also acceptable, but those claiming a deduction on that basis will have to keep the records to back up what they deduct.

For more details, go to http://www.irs.gov/pub/irs-drop/rp-09-54.pdf.

Meanwhile, Congress has failed to keep the federal estate tax from expiring. As a result, there currently is no federal estate tax in effect, but only for 2010.

Come 2011, absent Congressional action, the old rates (those in effect before the tax cuts of the Bush administration) come back into force.

Under those rates, estates over $1 million would be subject to tax at up to a 55 percent rate, instead of the much lower rates in effect in 2009, which only taxed estates over $3.5 million, and only up to 45 percent.

The level of the exemption is at least as important as the rates, since a threshold of only $1 million would render many more estates taxable.

There is talk in Congress of re-establishing the tax retroactively to the first of this year but so far its only talk.