IRS Announces Increase of Standard Mileage Rates for 2022

The IRS has announced an increase in Standard Mileage Rates for 2022. This increase will affect business, medical or moving, and charitable vehicles in use.

The Standard Mileage Rate for business vehicles will increase to 58.5 cents per mile. This is a 2.5 cent increase from 2021. 

The standard rate will increase to 18 cents per mile for medical or moving vehicles, up from 16 in effect during 2021. 

Vehicles used for charitable services will remain unchanged from 2021 at 14 cents per mile.

According to the IRS, "the standard miles rate for business use is based on an annual study of the fixed and variable costs of operating an automobile.” The costs for medical and moving purposes are based on just the variable costs.

Variable costs can include:

• Gas
• Oil
• Tires
• Maintenance costs
• Repairs
• Insurance
• Registration
• Depreciation or leased vehicles

Costs not included in the variable costs are geography, parking, and tolls. 

These rates apply to all vehicles, including:

• Cars
• Trucks
• Pickup Trucks
• Panel Tracks

Taxpayers can choose between using the standard mileage rates or calculating the actual costs of using the vehicle instead, but they must use the standard mile rates during the first year of usage. If the vehicle is leased, they also must use standard mileage rates, and personal use of an automobile cannot be deducted.

Taxpayers should also keep in mind that under the Tax Cuts and Jobs Act, they cannot claim miscellaneous itemized deductions for unreimbursed employee expenses or moving expenses unless they are members of the Armed Forces on active duty.

Visit the IRS website for more information regarding the standard mileage increases.

Don't forget to download our Payroll Calendar to keep up with tax dates deadlines in 2022!