The Internal Revenue Service (IRS) recently announced its optional standard mileage rates for 2022 used to calculate the deductible costs of operating an automobile for business, medical, charitable or moving purposes.

As of Jan. 1, 2022, the rates when using a car, van, pickup or panel truck are as follows:

  • 58.5 cents per mile for business purposes, increased 2.5 cents from last year. The rate is based upon an annual study of the costs of operating an automobile.
  • 18 cents per mile for medical or moving purposes for active-duty Armed Forces members, increased 2 cents from last year. The rate is based on variable costs associated with medical transportation and moving.
  • 14 cents per mile served to charitable organizations, unchanged from last year. The rate is based on an existing statute.

Under the Tax Cuts and Jobs Act, miscellaneous itemized deductions cannot be claimed for unreimbursed employee travel expenses. Individuals cannot deduct moving expenses unless they are active-duty members of the Armed Forces under orders to a permanent change of station. More information for moving deductions for Armed Forces members can be found here.

These rates are not required to be used, as taxpayers have the option to calculate their actual costs of using a vehicle instead. If taxpayers choose to use the standard mileage rate, they must use it in the first year the vehicle is available for business use. In the years following, they can opt to use the standard mileage rate or actual expenses. If the standard rate is chosen for a leased vehicle, the rate must be used during the entire lease duration, including if the lease is renewed.

If you have questions about the deductibility of your vehicle’s mileage in 2022, be sure to contact Doeren Mayhew’s business tax advisors today for assistance.