If you’re like most people, you’re feeling pain at the pump every time you fill up with gas. The good news is that the IRS has noticed and they have increased the standard mileage rates for the remainder of 2022.
Effective July 1, 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year. The new rate for deductible medical or moving expenses (available for active-duty members of the military) will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. The 14 cents per mile rate for charitable organizations remains unchanged.
The IRS made this special adjustment for the final months of 2022 in recognition of recent gasoline price increases. They typically update the mileage rates once a year in the fall for the next calendar year. The last time the IRS made a mid-year increase was in 2011. For travel from January 1 through June 30, 2022, taxpayers should use the rates set forth at the beginning of the year (58.5 cents/mile for business and 18 cents/mile for medical/moving.)
“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” said IRS Commissioner Chuck Rettig. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses, and others who use this rate.”
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. To make things easier at tax time, it’s important to keep your mileage logs for July to December separate from January to June.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
If you have any questions about the new mileage rates, please contact us.