Now here’s something you don’t hear often. The IRS has a gift for you. No, that’s not a joke and you don’t have to wait for the other shoe to drop. For the first time since 2011, the IRS is raising the standard mileage rate in the middle of the year because of the massive increase in gas prices—60% June to June according to numbers just released by the Bureau of Labor Statistics.
On July 1, 2022, the standard mileage deduction for taxpayers who can deduct business mileage went up to 62.5 cents per mile for the second half of the year. That’s up 4 cents from the effective rate used for the first six months of 2022.
Also, drivers who take the standard mileage deduction for medical or moving-related expenses also get an increase for the second half of 2022. That deduction goes up to 22 cents per mile, up from 18 cents during the first six months of the year.
IRS Commissioner Chuck Rettig says, “The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices. We are aware a number of 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.”
To find out if you’re eligible for the increase, you’ll find detailed information in various publications on the IRS website:
You may be wondering if the standard mileage deduction is going up when you use your vehicle for charitable purposes. In this instance, the rate remains at 14 cents per mile for the entire year. Charitable miles are somewhat different because the rate is set by statute.
Using the standard mileage deduction is just one way of taking qualified expenses off your taxes. The other method is calculating the actual cost. That requires you to have receipts and records gathered during the course of an entire year. It’s cumbersome and time consuming and only a small percentage of taxpayers choose that option.