global Tax IRS Raises Standard Mileage Rates for Remainder of 2022 June 13, 2022 The 2022 standard mileage rates have increased for the last six months of 2022! Read up on the new increased rates and how the changes will impact you. Attention drivers, the 2022 standard mileage rates have increased for the last six months of 2022. The IRS just announced the increased rates, which are used for determining the deduction for the costs of operating a vehicle for various business, charitable, moving, or medical reasons. What are the changes for the last half of 2022? Starting July 1, 2022, the standard mileage rates (for use of a car, van, pickup or panel truck) are: 62.5 cents for business miles driven (up from 58.5 cents per mile for the first half of 2022). This is the highest rate the IRS has ever published. 26 cents will be treated as depreciation for 2022 (no change) 22 cents per mile driven for medical or moving purposes (up from 18 cents per mile for the first half of 2022). Make note that the moving expense deduction is repealed except for U.S. armed forces members on active duty who move pursuant to a military order or permanent change of station. 14 cents per mile driven in service of charitable organizations (no change) How are the rates calculated? There are various factors that influence the standard mileage rates, including: Gas and oil prices Insurance costs The state of the economy The expected cost of typical wear and tear on a vehicle Hence the rates are purposed to go over and above the amounts a consumer pays solely for gas. Why did the rates increase? Midyear changes to the standard mileage rates are very rare, but the IRS felt an increase was necessary, to reflect the recent increase in fuel prices. The national average price of gas in the U.S. surpassed $5 per gallon for the first time as of June 9th. July and August are usually the peak driving months in the U.S., so the IRS hopes that this change will help taxpayers and businesses who use the rates. Is the standard mileage rate the only way to gauge deductions? No, taxpayers always have the option to claim deductions based on the actual costs of using a vehicle, as an alternative to using the standard mileage rates. The new rates are effective through December 31, 2022. Questions on the standard mileage rates for 2022? Contact any member of our Tax Services Team.
