What is the IRS mileage reimbursement rate for 2022?
Each year the tax authority gives a standardised rate for motor fuel, allowing those who need it for business purposes to make a deduction.
Each year the IRS issues a standard mileage rate, which is used by taxpayers who need to buy motor fuel for business reasons. The rate is used to calculate the deductible costs associated with operating an automobile for business.
Usually the reimbursement rate is fixed for a year but in 2022, with inflation running high and gasoline prices hitting record levels, the IRS opted to increase the rate.
From 1 July 2022, taxpayers will be able to claim a standard mileage rate for business travel of 62.5 cents per mile. This was a 4 cents increase on the rate introduced at the start of the year.
What is the IRS mileage rate? What kinds of factors impact the way the rate changes? And, when it does change, how should companies react?
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“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” explained IRS Commissioner Chuck Rettig. “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.”
This was the first midyear increase to the optional mileage rate since 2011.
For charity organisations, the rate of 14 cents per mile remains the same, because it is set by statute.