IRS Increases Business Travel Mileage Rates On July 1st, 2022
The IRS announced on June 9, 2022, that it would raise the standard mileage rate for business mileage for the final six months of 2022 from 58.5 cents per mile to 62.5 cents per mile due to the high cost of gas.
Mid-Year IRS Mileage Rates Increase
The normal mileage rate for business travel will be 62.5 cents per mile for the latter six months of 2022, an increase of 4 cents from the rate in place at the beginning of the year. For the balance of 2022, the new rate for deducting medical or relocating expenses (accessible to active-duty military personnel) will be 22 cents, an increase of 4 cents from the rate in effect at the beginning of 2022. On July 1, 2022, the revised mileage rates go into effect.
While fuel costs play a key role in the mileage computation, other expenditures, including depreciation, insurance, and other fixed and variable expenses, are also taken into account.
Instead of keeping track of actual costs, the optional business standard mileage rate is utilized to calculate the deductible costs of driving a car for work-related purposes. The federal government and many companies also use this rate as a benchmark when determining how much to pay for employee miles.
The option to calculate the actual costs of operating a car, as opposed to utilizing the normal mileage rates, is always available to taxpayers.
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