Tax Year 2022 Update: The IRS Responds to Inflation With A Rare Midyear Mileage Rate Change
| The IRS has announced an increase in the optional Standard Mileage Rate for the final 6 months of 2022. Taxpayers may use the optional (instead of actual expenses) standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other tax deductible purposes. Midyear increases in the optional mileage rates are rare; the last time the IRS made such an increase was in 2011. For the final half of 2022 (July 1, 2022 to December 31 2022): |
Business and Medical Mileage Change
| • The standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents. • The new rate for deductible medical & moving* expenses will be 22 cents, up 4 cents. • The rate for charitable organizations remains unchanged at 14 cents per mile. * availlble only for active-duty members of the military |
Prices Means Infation
"The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices," said IRS Commissioner Chuck Rettig. "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."
Though the price of fuel is definitely a major factor when it comes to calculating your mileage, there are other factors that have to be taken into account, including the rate at which your car depreciates as well as its insurance and any other fixed costs you might have.
Though the price of fuel is definitely a major factor when it comes to calculating your mileage, there are other factors that have to be taken into account, including the rate at which your car depreciates as well as its insurance and any other fixed costs you might have.
Optional Business Standard Mileage Rate vs. Actual Costs
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 continue to have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates, although this does require extensive recordkeeping.
Midyear increases in the optional mileage rates are rare; the last time the IRS made such an increase was in 2011.
Further details are available in IR-2022-124.
| n-22-03.pdf |
This post first appeared on Growth, Profits, & Wealth Blog By Travis Raml, CPA, please read the originial post: here
