Optional Standard Mileage Rate Boost to 65.5 Cents Per Mile
Do you drive an automobile, van, pickup or panel truck for business, charitable, medical or moving purposes? If so, effective January 1, 2023, you’ll enjoy a 3 cents bump in the mileage rate…up from the 62.5 cents midyear increase in 2022. The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile…clearly more expensive in recent months.
Here’s a quick summary of the expanded IRS provisions:
Notably, the new mileage rates apply to qualifying vehicles regardless of how they are powered…gasoline, diesel, electric and hybrid…all good-to-go.
Keep in mind that choosing the standard mileage rate is optional. Taxpayers retain the alternative to calculate the actual costs of operating their vehicle. That said, the standard rate generally must be used in the first year the car is operated for business use as described above. In subsequent years, either the standard mileage rate or itemized expenses may be preferred.
Note: Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.
The above presentation is meant as an overview only.
Give us a call and we’ll quickly help you determine your eligibility and ideal choice of deduction…standard or actual costs.