Internal Revenue Service announced an increase in the optional standard mileage rate beginning January 1, 2023. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.
The standard mileage rate for business travel will be 65.5 cents per mile, up 3 cents from the rate effective at mid year 2022. The new rate for deductible medical or moving expenses (available for active-duty members of the military) will remain at 22 cents for 2023.
These new rates become effective January 1, 2023. In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2022. The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.https://www.irs.gov/pub/irs-drop/n-23-03.pdf
The 14 cents per mile rate for charitable organizations remains unchanged as it is set by statute.
The IRS standard mileage rate is a key benchmark that’s used by the federal government and many businesses to reimburse their employees for their out-of-pocket mileage expenses.
While commonly called the mileage rate, it isn’t designed to just reflect what it is costing you to fill up your gas tank. It also takes into account other expenses associated with driving for business.
Check out https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2023-business-use-increases-3-cents-per-mile for more information from the IRS.