High Gas Prices Cause IRS to Raise Standard Mileage Rates

Due to current high gas prices, the IRS announced June 9 that it would increase the optional standard mileage rate for the final 6 months of 2022 from 58.5 cents per mile to 62.5 cents per mile for business mileage. The rate for deductible medical or moving expenses (active-duty military only) will increase four cents as well from 18 to 22 cents per mile. All new rates will be effective July 1, 2022, through Dec. 31, 2022. The mileage rate for charitable contributions remains fixed at 14 cents per mile by 26 U.S. Code § 170.

The agency normally updates the mileage rates once a year in the fall for the next calendar year, i.e., rates set in the fall of 2021 for all of 2022. With the June 9 announcement, taxpayers should use the original rates for 2022 for travel from Jan. 1 through June 30, 2022 and the June 9 rates for July 1, 2022 through Dec. 31, 2022. The extraordinarily high cost of fuel and petroleum products has resulted in a mid-year adjustment. This is unusual, having last occurred more than a decade ago in 2011, for the same reason. The rate adjustment in 2011 was 4.5 cents per mile from 51 to 55.5 cents per mile.