By Keiter CPAs
Increase in gas prices results in updated mileage rate for business vehicles
Recently, the IRS updated the standard mileage rates for 2023 for business use of an automobile, charitable use of an automobile, as well as the use of an automobile for medical and moving expense expenses.
Business use mileage rates
- 65.5 cents per mile
The standard mileage rate for business use of a vehicle for 2023 is 65.5 cents per mile, up from 62.5 cents per mile for the last half of 2022. The increase of 3 cents per mile is due mainly to increases in the cost of gasoline. The same rate applies to the business use of electric and hybrid vehicles.
Employers can use this rate to reimburse employees for the business use of their vehicles. Self-employed individuals can use this rate to claim their business mileage deduction. Since the TCJA in 2017, employees cannot claim a miscellaneous itemized deduction for unreimbursed costs of the use of an automobile.
Charitable deduction mileage rates
- 14 cents per mile
The standard mileage rate for the charitable use of a vehicle remains at 14 cents per mile. This rate is set by statute and remains unchanged from the 2022 rate.
Medical use mileage rates
- 22 cents per mile
The standard rate for the use of a vehicle remains at 22 cents per mile. This rate is unchanged from the rate that applied for the second half of 2022.
Moving expense mileage rates
- 22 cents per mile (active-duty members of the Armed Forces)
Since the 2017 TCJA, taxpayers cannot claim a deduction for moving expenses unless they are active-duty members of the Armed Forces moving under orders to a permanent change of station. This moving expense rate remains at 22 cents per mile, the same rate that applied for the second half of 2022.
Access the full content here: IRS Notice 2023-003.
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