The Internal Revenue Service (IRS) issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. 

As of Jan. 1, 2023, the rates when using a car, van, pickup or panel truck are as follows: 

  • 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022. 
  • 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022. 
  • 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022. 

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.  

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

Please remember that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot 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. 

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.