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VideoIRS Increases Standard Mileage Rate for Remainder of 2022
The IRS has increased the optional standard mileage rate to 62.5 cents per mile for the second half of 2022. The new rate is effective for July 1, 2022 to December 31, 2022, and taxpayers must continue to use the rate of 58.5 cents per mile for travel from January 1 through June 30, 2022. The mileage rate for charitable organizations remains at 14 cents per mile as set by statute.
Why did the IRS Raise the Rate?
The IRS usually updates the mileage rates once a year by factoring in insurance, depreciation, and other fixed and variable costs into the calculation. It made the mid-year adjustment for 2022 in response to recent increases in fuel prices. Mid-year mileage rate increases are unusual, with the last mid-year increasing coming in 2011, but previous mid-year increases have also come in response to rising fuel prices.
What does this mean for you?
Taxpayers can deduct the costs of operating an automobile using either the optional standard mileage rate or actual costs. If you take a deduction for business mileage, you should still be logging your business mileage with specific dates, mileage, and business reasons for your records. If you use a tax adviser, you will need to provide information for both before and after July 1, 2022 so your adviser can correctly calculate the standard deduction for your 2022 mileage.
For information about this increase, contact us. We are here to help.
Authored by Alyssa Hamilton, CPA.
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