On June 9, the IRS released Announcement 2022-13, which modifies Notice 2022-3, by revising the optional standard mileage rates for calculating the deductible cost of operating a vehicle for business, medical or moving expense purposes. The announcement is the result of the recent increases in the price of fuel.
The increase goes into effect on July 1, 2022. Midyear increases in the optional mileage rates are rare, as the IRS normally updates the mileage rates once a year in the fall for the next calendar year. The last time the IRS made a midyear adjustment was back in 2011, again as a result of rising fuel costs.
The rates for business mileage will go up to 62.5 cents per mile after July 1, 2022 but will remain at 58.5 cents from January 1 through June 30, 2022. Medical and Moving (for active-duty members of the military only) rates will also go up 4 cents from 18 cents per mile for the first half of the year to 22 cents for the second half of 2022. All other provisions of Notice 2022-3 remain in effect.
Charitable miles are unchanged at 14 cents per mile, as that rate is set by statute in IRC Section 170(i), meaning the IRS does not have authority to change that rate.
The revised standard mileage rates also apply to mileage allowances paid to an employee and for transportation expenses paid or incurred by the employee (reimbursed expenses). Remember that the Tax Cuts and Jobs Act (TCJA) suspended all miscellaneous itemized deductions that are subject to the two percent of adjusted gross income floor under Section 67 of the Code (including unreimbursed employee travel expenses and deductions for moving expenses for everyone except active duty Armed Forces members) for taxable years beginning after December 31, 2017 and before January 1, 2026.
Please contact your HM&M Tax Advisor for additional information.
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