The IRS has increased the standard mileage rate for deducting business use of an automobile to 62.5 cents for the last six months of 2022, 4 cents more than the January—June 2022 rate of 58.5 cents per mile. The new rate for medical miles and moving mileage for active-duty members of the military is also up 4 cents, now 22 cents per mile. (The Tax Cuts and Jobs Act (TCJA) removed the moving mileage deduction for all taxpayers except members of the military.) Congress set the charitable mileage rate in 1997, and it has been 14 cents per mile since that time.
Members of Congress Ask for Increase
Mileage deduction rates are set at the beginning of each calendar year and usually extend for the entire year. The last mid-year change was in 2011, when the business rate went from 51 cents to 55.5 cents per mile in recognition of gas price increases. This year’s change comes after two Senators, Michael Bennet (D-CO) and Catherine Cortez Masto (D-NV), wrote IRS Commissioner Charles Rettig in March noting the original 2022 mileage rate was released on December 17, 2021, when the national average gas price was less than $3.40 per gallon. The letter explains that, as of the end of March 2022, the average gas price had increased 28 percent.
“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” said IRS Commissioner Chuck Rettig in a statement announcing the new rates. “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.”
Taxpayers can use the optional standard mileage rates to calculate the deduction for automobile operating costs instead of tracking actual costs such as gas, repairs, insurance and depreciation. The rate also is used by many employers to reimburse their employees for business use of a vehicle.
Deciding which method to use and accounting for employee reimbursements are strategic decisions. Consult your Frazier & Deeter tax advisor to make sure you get the most from these deductions.
RECENT MILEAGE RATE CHANGES IN CENTS
| YEAR | BUSINESS | MEDICAL/MOVING | CHARITABLE |
| Jan—Jun 2022 | 58.5 | 18 | 14 |
| Jul—Dec 2022 | 62.5 | 22 | 14 |
| 2021 | 56 | 16 | 14 |
| 2020 | 57.5 | 17 | 14 |