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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 January 1, 2022, standard mileage rates for the use of cars, vans, pickup trucks, or panel trucks will increase to 58.5 cents per business miles driven, up from 56 cents in 2021. Medical and moving rates climbed to 18 cents in 2022 up from 16 cents in 2021, 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.
Standard Mileage Rates
The IRS mileage rates for 2022 apply to miles driven starting January 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.
For more information on the IRS 2022 mileage rates, see this IRS Article.
If you would like to talk to one of our professionals in our Entrepreneurial Support & Client Accounting Segment on this topic or any other business related topic, please do not hesitate to contact them.