IRS raises some mileage rates for 2022

Accounting

Two categories of 2022 optional standard mileage rates, used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes, are rising slightly next year.

Beginning Jan. 1, standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 58.5 cents per mile for business use, up 2.5 cents from the 2021 rate;
  • 18 cents per mile for medical purposes or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from this year; and,
  • 14 cents per mile in service of charitable organizations, the same as this year.

Mileage can vary. Taxpayers are allowed to calculate the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers using the standard mileage rate must use it in the first year the car is available for business use; in later years, they can choose either the standard mileage rate or actual expenses.
Leased vehicles must use the standard mileage rate method for the entire lease period if the standard mileage rate is initially chosen.

Notice 22-03 also contains the maximum auto cost used to calculate the allowance under a fixed and variable rate plan.

The notice also gives the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar 2022 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

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