The Internal Revenue Service recently issued the 2022 optional standard mileage rates, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Beginning July 1, 2022 standard mileage rates for the use of cars, vans, pickup trucks, or panel trucks will increase to 62.5 cents per business miles driven, up from 58.5 cents which began January 1, 2022. Medical and moving rates climbed to 22 cents on July 1, 2022 up from 18 cents in the first half of 2022, while charitable organization rates remain at 14 cents per mile.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. Increased fuel prices are one factor that has led to the change in rates.
The half-year increase IRS mileage rates for 2022 apply to miles driven starting July 1, 2022. These standard mileage rates are important because they provide small businesses with a framework for calculating deductible costs for operating a vehicle for business purposes.
The IRS does give taxpayers the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost recovery System (MACRS), or after claiming a Section 179 deduction for that vehicle.
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