On June 9, 2022, the IRS announced an increase in its mileage rates for the final six months of 2022. Beginning July 1, 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate that was effective at the beginning of the year.
The new rate per mile for deductible medical expenses will now be 22 cents, up from 18 cents, beginning July 1st, for the remainder of the year.
The mileage rate for charitable activities remains unchanged at 14 cents per mile since it is set by statute.
In a recent news release, the IRS said that they made a rare mid-year adjustment to reflect the increased price of gasoline since the start of the year. The last time the IRS made a midyear adjustment was in 2011.
It is important to note that the increased rates only apply to travel between July 1st and December 31st of 2022. For travel between January 1st and June 30th of 2022, taxpayers should use the prior rates of 58.5 cents per mile for business travel and 18 cents per mile for deductible medical expenses.
Businesses that reimburse employees for miles driven in their personal vehicles, or impute income to employees based upon an employee’s personal use of a company vehicle, should update their systems for the new rates. Taxpayers who are able to deduct business-related mileage on their tax returns, such as sole proprietors, will be able to new use the rates when calculating their vehicle deduction for the second half of 2022.
To discuss this information in more detail, contact a member of our team today.
Article written by:
Rob Roll, CPA
Tax Rotation Staff