IRS Increases Mileage Rates for Final Six Months of 2022

 The Internal Revenue Service announced an increase in the standard mileage rate for the final six months of 2022 due to the rise in gas prices. Taxpayers can use the standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.  The new rates will become effective July 1, 2022.  

This special adjustment made by the IRS is rare. The last time the IRS made a midyear increase was in 2011. While gas prices were a significant factor in this change, depreciation, insurance and other fixed and variable costs went into this decision making as well. Legal guidance on the new rates can be found in Announcement 2022-13. 

For the last half of 2022, the standard mileage rate for business travel and medical or moving expenses (available for active-duty members of the military) increased by four cents from the beginning of the year. Charitable organizations remain the same as it is set by statue at 14 cents per mile rate. For travel rates from January 1 to June 30, 2022, taxpayers should use the rates in Notice 2022-03. 

The business standard mileage rate is used to compute the deductible costs of operating an automobile for business use on behalf of tracking actual costs. The federal government and many businesses use this rate as a benchmark to reimburse their employees for mileage. Taxpayers can choose to not use the standard mileage rate and calculate the actual costs of using their vehicle instead.  

 Updated Mileage Rate Changes

PurposeRates 1/1 through 6/30/22Rates 7/1 through 12/31/22
Business58.5 cents62.5 cents
Medical/Moving18 cents22 cents
Charitable14 cents14 cents

 

Please contact BSSF or your tax advisor if you have any questions regarding mileage reimbursement rates. 

Disclaimer: Information provided by Brown Schultz Sheridan & Fritz (BSSF) as part of this blog post is intended for reference and information only. As the information is designed solely to provide guidance and is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations, responding to such inquiries does NOT create a professional relationship between BSSF and the reader and should not be interpreted as such. Although BSSF has made every reasonable effort to ensure that the information provided is accurate, BSSF makes no warranties, expressed or implied, on the information provided. The reader accepts the information as is and assumes all responsibility for the use of such information.