Standard Mileage Rates Increase for Remainder of 2022

Jul 5, 2022 | Tax & Accounting

The optional standard mileage rate, which taxpayers may use to calculate the deductible costs of operating an automobile for business and certain other purposes, increases to 62.5 cents per mile, effective July 1, 2022. The new mileage rate is up 4 cents from the rate effective at the start of the year.

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.

The rate for deductible medical or moving expenses (available for active-duty members of the military) increases for the remainder of 2022 as well, to 22 cents per mile. This new rate is up 4 cents from the rate effective at the start of 2022.

Taxpayers should note that the 14 cents per mile rate for charitable organizations remains unchanged as it is set by statute.

Normally, the IRS updates the mileage rates once a year, generally in the fall, for the next calendar year. As a reminder, for travel from January 1 through June 30, 2022, taxpayers should use the current mileage rates (58.5 cents per business mile and 18 cents per medical and moving – military members only).

The rate increases are a special adjustment for the final months of 2022 in response to recent gasoline price increases. While fuel costs are a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance, and other fixed and variable costs. Midyear increases in the optional mileage rates are rare. The last time the IRS made such an increase was in 2011.

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