The IRS recently announced an increase of 4 cents to the optional standard mileage rate due to the increase in gas prices. The new rates are effective July 1, 2022- December 31, 2022:
- Business travel rate is now 62.5 cents per mile
- Deductible medical expenses is now 22 cents per mile
- Moving expenses (available for active-duty members of the military) is now 22 cents per mile
Note – the 14 cents per mile rate for charitable organizations remains unchanged as it’s set by statute.
You can use the optional rate to calculate the deductible costs of operating a car for business and certain other purposes in lieu of tracking actual costs. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
Midyear increases in the optional mileage rates are rare, the last time the IRS made such an increase was in 2011.