For the final six months of 2022, the Internal Revenue Service has increased the optional standard mileage rate. The optional standard mileage rates can be used by taxpayers to assess the deductible costs of using a car for business and certain other activities.
The normal mileage rate for business travel will be 62.5 cents per mile for the final six months of 2022, up 4 cents from the rate in place at the beginning of the year. For the remainder of 2022, the new rate for deductible medical or moving expenditures (accessible to active-duty military personnel) will be 22 cents, up 4 cents from the previous rate. On July 1, 2022, the revised rates will take effect. In Announcement 2022-13, the IRS gave legal advice on the increased rates.
The IRS made this special adjustment for the last few months of 2022 an acknowledgement of recent fuel price hikes. Once a year, in the fall, the IRS adjusts the mileage rates for the following calendar year. Taxpayers should utilise the rates specified in Notice 2022-03 for travel between January 1 and June 30, 2022.
“The Internal Revenue Service is revising the normal mileage rates to better reflect the recent increase in fuel prices,” stated IRS Commissioner Chuck Rettig. “We recognise that a variety of exceptional issues affecting gasoline costs have come into play, and we are taking this particular action to assist taxpayers, businesses, and others that use this rate.”
While fuel prices play an important role in calculating mileage rates, other factors such as depreciation, insurance, and other fixed and variable costs are also taken into account.
Instead of tracking actual costs, the optional business standard mileage rate is utilised to calculate the deductible costs of driving a car for business. The federal government and many businesses use this rate as a standard when determining how much mileage should be reimbursed.
Read more:-
- Head Start and Early Head Start services are available to SNAP families
- Donald Trump’s parting present from Bill Barr: a probable “get out of jail free” card
- Joe O’Dea, a Republican Senate candidate, aspires to move from the construction industry to Congress
Instead of utilising the usual mileage rates, taxpayers can always calculate the actual expenditures for driving their vehicle.
The statutory rate of 14 cents per mile for nonprofit organisations has not changed.
“The IRS is modifying the typical mileage rates to better reflect the recent increase in fuel prices,” said IRS Commissioner Chuck Rettig. “We recognise that several unique concerns affecting gasoline prices have arisen, and we are taking this measure to help taxpayers, businesses, and others who rely on this rate.”
While fuel prices are significant in determining mileage rates, other factors like depreciation, insurance, and other fixed and variable costs are also considered.
Instead of tracking actual expenditures, the deductible costs of driving a car for business are calculated using the optional business standard mileage rate. This rate is used by the federal government and many businesses to determine how much mileage should be reimbursed.
Optional mileage rate increases in the middle of the year are uncommon; the IRS last did it in 2011.
