Motorists are paying gas prices 62 percent higher than last year and the Internal Revenue Service has announced a 7 percent increase in the optional standard mileage rate for the final six months of 2022.
It’s the first time since 2011 the IRS increased the rate in the middle of the year.
Beginning July 1, the standard mileage rate for business travel will be 62.5 cents per mile, an increase of four cents per mile from the 58.5 cents effective on January 1, 2022. The new mileage rate for deductible medical or moving costs will be 22 cents for the remainder of the year, an increase of 4 cents. The rate of 14 cents per mile for charitable organizations remains unchanged as the amount is set by statute.
Taxpayers use the IRS standard mileage rate to calculate the deductible costs of operating an automobile for business and other purposes. Many businesses use the rate to reimburse employees for mileage using personal automobiles.
“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” IRS Commissioner Chuck Rettig said in a written statement. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses, and others who use this rate.”
In addition to fuel costs, the IRS considers depreciation, insurance, and other fixed and variable costs to determine the standard mileage rate.
The national average for a gallon of regular gas was $4.970 toward the end of this week, according to the AAA gas prices report.
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