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IRS Increases Mileage Deduction

21 Aug 2022 11:43 AM | Anonymous

The IRS recently announced an increase in the optional flat mileage rate deduction for use on business travel that occurs between July 1, 2022 and December 31, 2022. The flat rate was increased from US$0.585 per mile to US$0.625 per mile. The decision to raise the flat rate was a result of rising gasoline prices.  

For the business use of an automobile, an individual can either deduct actual operating costs or the actual milage traveled using the flat mileage rate as described above. Although individuals who elect to use the flat mileage rate cannot deduct actual auto expenses on a tax return, tolls and parking fees are allowed in conjunction with the flat mileage rate.

For nonprofit volunteers, the cost of using a personal car to provide charitable volunteer services may be deducted. Volunteers may either use actual expenses or the flat charity mileage rate; however, this rate is different from the rate outlined above. The charity mileage rate is US$0.14 per mile, and this rate was not affected by the recent IRS change.

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