In response to the significant rise in fuel prices, the IRS recently announced a special adjustment in the optional standard mileage rate for the remainder of 2022.
The optional standard mileage rate is used by taxpayers to calculate the deductible costs of operating a vehicle for business use (as an alternative to tracking actual costs). The federal government and many businesses use this rate to reimburse their employees for mileage.
Effective July 1, 2022 the new optional standard mileage rate will increase 4 cents from 58.5 cents per mile to 62.5 cents per mile.
An adjustment was also made to deductible medical or moving expenses (available for active-duty members of the military) going from 18 cents to 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022.
These new rates become effective July 1, 2022. The IRS provided legal guidance on the new rates in Announcement 2022-13.
For travel from Jan. 1 through June 30, 2022, taxpayers should use the rates as noted in Notice 2022-03.
For more information: https://www.irs.gov/newsroom/irs-increases-mileage-rate-for-remainder-of-2022