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New 2022 IRS Standard Mileage Rates

New 2022 IRS Standard Mileage Rates

The Internal Revenue Service has released new standard mileage rates for driving a car for business, charity, medical, or moving purposes in 2022.


New IRS mileage rates

The new IRS mileage rates apply to trips beginning January 1, 2022.

  • 58.5 cents per mile for businesses

  • 18 cents per mile for moving or medical reasons

  • 14 cents per mile for charitable purposes

New mileage rates have increased to 56 cents per mile for business purposes and 16 cents per mile for medical or relocation purposes in 2021. The new mileage rates have increased due to changing fuel prices, insurance costs, and fuel economy.

The portion of the business mileage rate allocated to depreciation is 26 cents per mile in 2022, which remains unchanged from 26 cents per mile in 2021.

If an employee's actual expenses for operating a commercial vehicle are higher, the employee can deduct a higher amount if the employee documents the actual expenses.

The IRS sets new annual mileage rates for business and medical travel/transfers. Charitable rates are set by law [26 USC 170(i)], which does not change.


What does the IRS mileage rate cover?

The same rate applies to all vehicles, including cars, vans, panel trucks, and pickup trucks.

Mileage costs include the variable costs of operating a vehicle, such as gasoline, oil, tires, repairs, and maintenance, as well as the fixed costs of operating the vehicle, such as registration, insurance, and depreciation or rental costs. 

The mileage rates do not include parking fees and taxes. Also, it does not vary by location or geographic area, and taxpayers cannot deduct the personal use of a vehicle when it comes to mileage rates.


Business Reimbursement 

Many companies use IRS mileage rates to reimburse employees for business car travel.

Some colleges base the cost of tuition on business mileage and distance from home to school for traveling students. However, if public transport is available, they will use the cost of a bus or train permit, whichever is lower.


Deductibility may be limited.

The TCJA (Tax Cuts and Jobs Act) of 2017 temporarily removed various itemized deductions until December 31, 2025, which prevents taxpayers from claiming a deduction for unreimbursed employee travel expenses. Previously, various itemized deductions above 2% of AGI were deductible.

The law also removed the relocation expense deduction until the end of 2025. There is an exception for active-duty members of the U.S. military who relocate due to a permanent change in season and for members of reserve serving more than 100 miles far off from their homes.

There are also exceptions for paid state and local officials, certain performing artists, and high school teachers, who can deduct travel expenses not reimbursed by employees as an expense adjustment on the deductions listed in Schedule A.

However, self-employed taxpayers can deduct their mileage as a business expense in Schedule K-1 (IRS Form 1065) for partnerships, Schedule C for sole proprietorships, IRS Form 1120 or IRS Form 1120S for corporations.


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