Rising gas prices have inspired the Internal Revenue Service to increase the “optional standard mileage rate” used to calculate tax deductions by 4 cents a mile for the last six months of 2022. This adjustment is normally not made mid-year.
The optional adjustment starts July 1 and brings the IRS rate to 62.5 cents per mile. It comes after a 2.5-cent increase went into effect in January and represents the first mid-year adjustment made since 2011, the IRS said.
- Taxpayers use the rate to calculate the “deductible costs of operating an automobile for business and certain other purposes” instead of tracking actual costs.
- It’s also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
Employers do not have to mirror the federal rate nor legally offer gas reimbursement.