On June 9, 2022, the IRS announced that they are increasing the optional standard mileage rate for the rest of 2022. Effective July 1, 2022, the standard mileage rate for business travel will increase 4 cents from 58.5 to 62.5 cents per mile. The rate for deductible medical and moving rates will also increase 4 cents from 18 to 22 cents. The IRS also provided legal guidance for the changes in Announcement 2022 – 13.
The IRS usually updates the mileage rate once a year in the fall for the next calendar year but is making this special midyear increase in response to recent gas price increases. IRS Commissioner Chuck Rettig said, “ 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.” According to the IRS, fuel costs are influential to the mileage figure, but other items such as depreciation, insurance, and other fixed and variable costs factor into the calculation as well.
The optional standard mileage rate is used to calculate the deductible costs of operating an automobile for business use in lieu of tracking actual costs. The rate is also used by the federal government and many businesses as the standard rate to reimburse their employees for mileage. Visit the IRS website for more information: https://www.irs.gov/newsroom/irs-increases-mileage-rate-for-remainder-of-2022
Contact one of our experts if you have any questions about the standard mileage rate.