IRS Raises Mileage Rates Due to Rising Gas Prices
By: Stacey Nickens
This summer, I’ve sat around many a dinner table, bemoaning the rise in gas prices. Many of us have seen our gas bills rise astronomically. Luckily, if you use your car for business, the IRS has recognized the rise in gas prices by increasing the optional standard mileage rate for the final 6 months of 2022.
Normally, the IRS sets an optional standard mileage rate once per year. Taxpayers will then use that rate for the entire year to determine the deductible costs associated with a vehicle used for business or certain other purposes.
Miles driven for business purposes can currently be deducted at a rate of $0.585 per mile. This rate will be used for business miles driven between January 1 and June 30. However, beginning on July 1 through December 31, miles driven for business purposes can be deducted at a rate of $0.625 per mile.
The IRS has also increased the optional standard mileage rate for medical and moving expenses. Miles driven from January 1 through June 30 can be deducted a rate of $0.18 per mile. Miles driven from July 1 through December 31 can be deducted at a rate of $0.22 per mile.
The standard mileage rate for charitable organizations remains unchanged at $0.14 per mile.
Mid-year increases in the optional standard mileage rate are fairly uncommon. A mid-year increase in the optional standard mileage rate has not occurred since 2011.
As was the case before, taxpayers also have the option of calculating the actual costs of operating a vehicle for business purposes instead of using the optional standard mileage rate. If you have any questions regarding the mileage deduction, please do not hesitate to reach out to our experienced tax team.
