On June 9, 2022, the Internal Revenue Service (IRS) issued Announcement 2022-13, increasing the standard mileage rate for the final six months of 2022 from 58.5 cents per mile to 62.5 cents per mile. The new rate is effective for traveling starting July 1, 2022, through December 31, 2022.
In addition, the new rate for deductible medical or moving expenses (available for active-duty military members) will be 22 cents per mile for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. The rate for charitable mileage expenses remains at 14 cents per mile.
In the IRS press release, IRS Commissioner Chuck Rettig noted: “The IRS is adjusting the standard mileage rates to reflect the recent increase in fuel prices better. We are aware several unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses, and others who use this rate.”
The standard mileage rate is a national average rate, which considers various factors, including fuel costs, depreciation and insurance, and other fixed and variable costs. The business standard mileage rate is used to compute the deductible costs of operating an automobile for business use instead of tracking actual expenses. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. Employers continue to have the option to use other methods that calculate their vehicle’s actual costs rather than the standard mileage rates.
Mid-year increases in the standard mileage rates are uncommon and last occurred in 2011. However, employers should ensure that they properly account for the rate increase beginning July 1, 2022.
How can we help?
Learn ways to credit mileage directly to a person’s time card or through Time Equipment Company’s payroll service. For more information about how we can help, contact Time Equipment Company at sales@timeequipment.com or 800-997-8463.
