The IRS has finally announced the standard business mileage rate for 2022. As we predicted previously, the rate has gone up from 56 cents to 58.5 cents.
This is the rate that taxpayers can use when they file their 2022 income taxes if they are claiming a mileage deduction for a vehicle that they use for business. Companies are also welcome to use this rate when reimbursing their mobile employees, but it’s worth noting that this is a just recommendation in most states, not a federal requirement.
In addition to the business mileage rate increasing, the rate for medical and armed forces-related moving mileage has increased from 16 cents to 18 cents. The rate for miles driven in service of charitable organizations remains unchanged from last year.
How the IRS Determines the Standard Mileage Rates
While we discussed this in further detail in a previous blog post, it’s worth mentioning briefly how the IRS determines its standard mileage rates.
Every year, the IRS hires an independent contractor to conduct a study into what the fixed and variable costs of owning and operating a motor vehicle in the United States are. These costs can include things like the cost of maintenance, oil changes, fuel prices, tires, as well as the overall depreciation of the car.
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Our team is standing by to help your company save time and money with a robust and detailed mileage reimbursement plan. Please schedule a complimentary live web demo for your company to learn more about how our product can help your streamline your mileage reimbursement process.