Each year, the IRS releases a new standard mileage rate. The 2023 mileage rate will likely be published in late December 2022.
The IRS calculates the business rate based on an annual study of the fixed and variable costs of owning and 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.)
We'll update the below with the 2023 standard mileage rate as soon as it becomes available from the IRS. Typically, the rate applies to all miles driven that year, though 2022 was unusual (but not unprecedented) in that the IRS released an increased rate for the second half of the year because of how quickly gas prices shot up. Gas prices have come back down since then, so based on our analysis we expect the 2023 mileage rate will be 60 cents per mile or lower.
Business: 60 cents per mile (estimated)
Charity: 16 cents per mile (estimated)
Medical / Moving: 20 cents per mile (estimated)
Business:
62.5 cents per mile from July 1 - December 31
58.5 cents per mile from January 1 - June 30
Charity: 14 cents per mile from January 1 - December 31
Medical / Moving:
22 cents per mile from July 1 - December 31
18 cents per mile January 1 - June 30
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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