Each year, the IRS releases a new standard mileage rate. The IRS calculates the business rate based on an annual study of the fixed and variable costs of operating a car. So when rates change, it’s due to common car costs—like gas prices or insurance premiums—changing. (The medical and moving rates are just based on variable costs.)
Business: 58.5 cents per mile
Charity: 14 cents per mile
Medical / Moving: 18 cents per mile
Note: The business mileage rate reflects a 2.5 cent increase from 2021, suggesting that the costs of operating a car have relatively increased.
The IRS announced the mileage rate for the 2022 on December 17, 2021. As expected the standard rate for business surpassed 58 cents per mile—the previous high from 2019—given the costs of operating a car generally increased in 2021.
Beginning January 1, 2022, businesses reimbursing their employees for personal use of their vehicle using a Cents Per Mile program should look at updating their rate to the new standard, or if using your own rate, increase it to reflect current costs, up to the standard mileage rate. As the IRS reminded us, "under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses." Employees likely won't be too happy if they're getting reimbursed for less than their actual costs as they can't deduct the difference on their taxes.
For independent contractors and self-employed people, 58.5 cents will be how much you can deduct per mile on your 2022 taxes. That deduction can really add up, so make sure you track every mile you drive for work.
Want more information? Head to the IRS’s page on Standard Mileage Rates.
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