IRS Boosts Standard Mileage Rate

June 16, 2022 | Tax Advice |

The IRS announced on June 9, 2022 that the optional standard mileage rate is increasing by 4 cents per mile for the last six months of 2022. Effective July 1, the standard mileage rate for business travel will be 62.5 cents per mile. This represents a 4 cent per mile increase and comes at a time when the average national price for gasoline has increased to more than $5 a gallon.

The rate for deductible medical or moving expenses (which is available only for active-duty members of the military) is also increasing by 4 cents per mile and will be 22 cents for the second half of 2022.

The IRS says it is making the adjustment in recognition of recent increases in the cost of gasoline. Normally, the adjustment is made annually (the 2022 rate was originally set in Notice 2022-03), but IRS Commissioner Charles Rettig said the Service was taking this “special step” “to better reflect the recent increases in fuel prices.” The IRS last made a midyear adjustment to the rate in 2011.

Taxpayers can use the optional business standard mileage rate to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. Businesses also often use the standard mileage rate to reimburse their employees for use of their personal vehicles. For taxpayers that maintain mileage logs and track their business miles to utilize the standard mileage deduction for vehicle expenses, it will be important for you to identify miles driven before and after June 30 to make sure that you are using the appropriate standard mileage rate.

Please keep this in mind as you prepare your mileage documentation.

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