IRS publishes standard mileage rates for 2023
In July, your business mileage tax deduction became more valuable for 2022 after an announcement by the IRS. As of July 1, 2022, the standard mileage rate increased by 4 cents to 62.5 cents per mile. The medical and moving mileage rates also rose by 4 cents to 22 cents per mile.
However, the 2023 optional standard mileage rates are now available. These rates determine the deductible costs for driving a car for work, charity, medical, or moving purposes beginning January 1, 2023.
Standard mileage rates
Along with cars powered by gasoline and diesel, the rate changes also affect hybrid and electric vehicles. The following standard mileage rates will apply to the usage of an automobile, including vans, pickups, and panel trucks:
- The rate for the second half of 2022 will be 65.5 cents per mile driven for commercial purposes, an increase of 3 cents from the midyear rise
- For qualified active-duty members of the armed forces, the midyear cost will increase to 22 cents per mile driven for medical or moving purposes in the second half of 2022
- 14 cents per mile driven for charitable organizations (the statute regulates this and, therefore, will not change from 2022)
Maximize the value
An annual analysis of the fixed and variable costs of driving an automobile is the foundation for the standard mileage rate for business use. In addition, the rate calculation for moving and medical purposes is based on variable costs.
Due to the Tax Cuts and Jobs Act, taxpayers cannot write off unreimbursed employee travel as a miscellaneous itemized deduction.
Check out July’s blog post, “Your business mileage deduction just became more valuable,” for tips to make the most of your business’s vehicle expense deduction. Contact our RRBB accountants and advisors if you have questions about the new standard mileage rates.
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