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IRS Issues Standard Mileage Rates for 2022

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What You Need to Know

  • These rates are used to calculate deductible costs of operating a vehicle.

The Internal Revenue Service issued the 2022 optional standard mileage rates on Friday. These are used to calculate deductible costs of operating a car, van, pickup or panel truck for business, charitable, medical or moving purposes.

Following are the standard mileage rates for use of these vehicles, starting Jan. 1:

  • 58.5 cents/mile driven for business use, up 2.5 cents from 2021 rate
  • 18 cents/mile driven for medical or moving purposes for qualified active-duty Armed Forces members, up 2 cents
  • 14 cents/mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2021

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. For medical and moving purposes, the rate is based on the variable costs.

The IRS noted that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses.

Nor can they claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station.

Taxpayers have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates, according to the announcement.

The IRS said taxpayers can use the standard mileage rate but must choose to do so in the first year the car is available for business use. In later years, they can then choose either the standard mileage rate or actual expenses. 

Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the taxpayer chooses the standard mileage rate.

As part of its announcement, the IRS included Notice 22-03, which contains the optional 2022 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate plan. 

The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2022 for which employers may use the fleet-average valuation rule or the vehicle cents-per-mile valuation rule.

(Photo: Adobe Stock)