2022 Standard Mileage Rates Issued

Each year, the IRS issues optional standard mileage rates for the coming year. The rates cover the cost of using your personal vehicle, most commonly for business, but also if you drive for medical, moving, or charitable purposes. Each of these has a different rate and rules.

Beginning on January 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 58.5 cents per mile driven for business purposes (up from 56 cents)
• 18 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, (up from 16 cents)
• 14 cents per mile driven in service of charitable organizations; the rate is set by statute (unchanged since 1998).

The rate for business use is based on the average fixed cost of ownership (insurance, registration, depreciation, etc.) plus the average variable operating costs of a car (gas, oil, maintenance, etc.). The rates for moving and medical are based only on the operating costs. The same rate applies to all automobiles, including cars, vans, pickup trucks and panel trucks.

Taxpayers have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, 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 (including renewals) if the standard mileage rate is chosen.

The mileage rates do not include the cost of parking and tolls and do not vary by geographic location.

Deductibility Exceptions

It is important to note that under the Tax Cuts and Jobs Act (“TCJA”), taxpayers are prevented from claiming a deduction for unreimbursed employee travel expenses. Previously, the expenses greater than 2% of your AGI were deductible as miscellaneous itemized deductions on an employee’s personal tax return.  This portion of the TCJA is set to expire in 2026 and the unreimbursed employee travel expense will be deductible again. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station.

The deduction is also limited to state and local government officials who are paid on a fee basis, certain performing artists and elementary and secondary school teachers, who can deduct unreimbursed employee travel expenses as an adjustment to income on Schedule 1 of IRS Form 1040, as opposed to itemized deductions on Schedule A.

Additional taxpayers may be able to deduct their mileage as a business expense as follows:

• Schedule C for self-employed/sole proprietorships
• Schedule K-1 (IRS Form 1065) for partnerships
• IRS Form 1120 or Form 1120S for corporations

If any questions arise when implementing these mileage rates or adjustments, please reach out to your BMF Tax Advisor.