Preface: “Don’t listen to what they say, go see” – Chinese Proverb
Revised IRS Mileage Rates July 1 to 62.5 Cents Per Mile
Effective July 1, 2022 “The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” said IRS Commissioner Chuck Rettig. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate.”
US Senators. Catherine Cortez Masto, D-Nev., and Michael Bennet, D-Colo were both key influencers of the IRS decision. The belated mileage rate increase as of mid-year 2022 to $0.625 raises the deductible business expense per mile $.04 from the beginning year $0.585. The IRS sees the mileage rate increase necessary when cost accounting for a May average of $4.50 per gallon of gasoline, an increase of nearly 34% since December of 2021. The IRS business mileage rate data since 1991 has increased from $0.275 per mile to the most recent $0.625 per mile, effective July 1, 2022. Of note is 1991 gasoline priced at an average $1.14 per gallon.
The average driver in the US consumes approximately 650 gallons of fuel per year, so an estimated 2022 budget per auto owner for 2022 could be above $3,000 in gasoline purchases.
Although other factors include depreciation, insurance, tires, repairs, and maintenance are computed into this rate, it is noted that actual costs may be more reflective of true costs for business mileage. Rate increases have only occurred three times mid-year since the early 1990s. Taxpayers deducting business mileage rates must keep detailed records and a logbook, or use a mobile app to track beginning and ending mileages to obtain a tax deduction.