In recognition of recent fuel price increases, the IRS, in a rare mid-year move, has announced increases in the deductible mileage rates for the remainder of 2022. The adjustment of 4 cents per mile for business, moving and medical vehicle use goes in effect on July 1st for travel occurring on or after that date. Mileage for charitable vehicle use remains unchanged.
The table below shows a breakdown of the change.
Updated 2022 Standard Mileage Deduction Rage
Vehicle Use | Mileage Rate Jan. 1 to June 30, 2022 (cents per mile) | Mileage Rate July 1 to Dec. 31, 2022 (cents per mile) |
Business | 58.5 | 62.5 |
Moving/Medical | 18 | 22 |
Charitable | 14 | 14 |
While other regional and national factors come into play, there are four primary reasons for the increase in the price of gasoline, which is behind the IRS mid-year bump to milage rates. Supply disruptions caused by the war in Ukraine, weather extremes due to annual hurricane and tornado damage, a switch to more expensive summer gasoline blends, and an increase in summer travel.
IRS optional standard mileage rates for business, medical, moving, and charitable deductions are usually set in the fall for the following calendar year, based on the average cost of maintaining a car for those stated uses on a per-mile basis. Sometimes, as is the case for 2022, a mid-year correction is needed, to account for a large increase in the cost of fuel and other petroleum products.
KEY TAKEAWAYS
· The IRS has raised the standard mileage rates for the rest of 2022.
· The new rate for business mileage will be 62.5 cents per mile.
· Medical mileage and moving expenses (for active-duty military only) will go up to 22 cents per mile.
· Charitable mileage is set by statute and will remain at 14 cents per mile.
· New rates are effective July 1, 2022, through Dec. 31, 2022.
· The increase in mileage rates is due to a mismatch between supply and demand for petroleum products.
A link to the full notice, Announcement 2022-13, can be found here.
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