IRS Adjusts Mileage Rates Midyear

06.13.2022
motor-vehicles
Small Business

Soaring gas prices have led the IRS to increase the optional standard mileage rates for the second half of 2022. 

Beginning July 1, the standard mileage rate for business travel will be 62.5 cents per mile driven until Dec. 31, 2022. 

That represents a four-cent increase from the current rate, and 6.5 cents from 2021. 

The mileage for driving medical products or moving purposes will also increase to 22 cents per mile driven. 

The mileage rates for driving in service of charitable organizations will remain unchanged at 14 cents per mile driven. It is set by statute. 

Gas Prices

IRS officials said the changes will better reflect gas prices. 

“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,” IRS Commissioner Chuck Rettig said in a release. 

Officials noted that depreciation, insurance, and other fixed and variable costs contributed to the increase as well.

Depreciation, insurance, and other fixed and variable costs contributed to the increase as well.

Still, it is unusual for the IRS to make midyear changes to the optional mileage rates. 

The last time there was a mid-year increase was in 2011. 

For vehicle use from Jan. 1 through June 30, 2022, employers should use the rates set in IRS Notice 2022-03.

Tax Options 

The IRS reminds taxpayers they still have the option of calculating the actual costs of using their vehicle, rather than the standard mileage rates. 

Low-mileage drivers often chose to use the plan. 

Taxpayers have the option of calculating the actual costs of using their vehicle.

If taxpayers chose to use the standard mileage rate, they must opt to do so in the first year the car is available for business use.

For the years that follow, they can choose either standard mileage rate or actual expenses.

Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses.  

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