The Internal Revenue Service announced an increase in the optional standard mileage rate for the final 6 months of 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.
For the final 6 months of 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 as it is set by statute. These new rates become effective July 1, 2022. The IRS provided legal guidance on the new rates in Announcement 2022-13.
In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2022. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. For travel from January 1 through June 30, 2022, taxpayers should use the rates set forth in Notice 2022-03.
“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. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Midyear increases in the optional mileage rates are rare, the last time the IRS made such an increase was in 2011.
We are here to help you.
If you have questions on how the new rates should be used by your business, please contact your Whitinger advisor to discuss your specific situation. We can help you help you stay compliant with all state and federal reporting standards.
Mileage Rate Changes (effective 7/1/22)
|Purpose||Rates 1/1 through 6/30/2022||Rates 7/1 through 12/31/2022|