What You Need to Know About the IRS Mileage Rate Increase
By Alex Smith, CPA
In an unusual step, the IRS increased the standard mileage rate to 62.5 cents per mile for the second half of 2022, effective July 1, 2022 (Announcement 2022-13). This is an increase of 4 cents per mile compared to the original rate announced earlier this year.
Medical and military moving miles also received a 4 cent per mile increase, bringing the mileage rates up to 22 cents per mile. No increase was included for charitable contribution miles, the rate remaining at 14 cents per mile.
The standard mileage rates are usually set at the beginning of each year and is effective for the whole year. The last time the IRS made a special mid-year adjustment to the rate like this was in 2011.
The IRS stated they wanted to increase the rate as a “special step to help taxpayers, businesses and others who use this rate… and to better reflect the recent increase in gasoline prices” per the IRS Commissioner, Charles Rettig.
The standard mileage rate allows businesses to compute deductible costs of operating a vehicle rather than having to track actual costs per vehicle. This could be welcome news to businesses and employees all too aware of the increasing price of gasoline.
Please reach out if you would like to discuss this increase in the standard mileage rate with any of our tax professionals.