In response to recent gasoline price increases, the IRS recently announced a 4-cent increase in the optional standard mileage rate for business travel during the last 6 months of 2022.
Effective July 1, the standard mileage rate for business travel will be 62.5 cents per mile. The new rate for deductible medical expenses or moving expenses (available for active-duty military) will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022.
The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use. This rate is also used as a benchmark by the federal government and many businesses that reimburse employees who use personal vehicles for business travel.
“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.”
While fuel costs are a significant factor in the mileage figure, other items affect the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.
The 14 cents per mile rate for charitable organizations remains unchanged as it is set by statute.
Mid-year increases in the optional mileage rates are rare; the last time the IRS made such an increase was in 2011.