On June 9, 2022, the Internal Revenue Service issued Announcement 2022-13 which increased the optional standard mileage rates for the final 6 months of 2022 in an effort to address inflation and gas price increases. Beginning July 1, 2022, these new rates go into effect to provide some needed relief to U.S. taxpayers. However, taxpayers should be aware that standard mileage will be calculated at the lower rate for the first six months and calculated at the higher rate for the last six months.
STANDARD MILEAGE RATES FOR JANUARY 1, 2022 TO JUNE 30, 2022
From January 1, 2022 to June 30, 2022, standard mileage rates are as follows:
- Business standard mileage rate = $0.585 per mile.
- Medical care mileage rate = $0.18 per mile.
- Charitable service standard mileage rate = $0.14 per mile (this amount is fixed under 26 U.S.C. 170(i).
STANDARD MILEAGE RATES FOR JULY 1, 2022 TO DECEMBER 31, 2022
From July 1, 2022 to December 31, 2022, standard mileage rates are as follows:
- Business standard mileage rate = increase to $0.625 per mile.
- Medical care mileage rate = increase to $0.22 per mile.
- Charitable service standard mileage rate = $0.14 per mile (this amount is fixed under 26 U.S.C. 170(i).
OTHER ASPECTS OF THE TAX CUTS AND JOBS ACT OF 2017 REMAIN IN FULL FORCE AND EFFECT
While the IRS did increase the standard mileage rates for the second half of 2022, other restrictions in place under law remain in effect.
For example, the Tax Cuts and Jobs Act of 2017 still suspends all miscellaneous itemized deductions that are subject to the 2% of adjusted gross income floor under 26 U.S.C. §67, including unreimbursed employee expenses between December 31, 2017 and January 1, 2026 (except for members of the Armed Forces, certain state and local government officials, and performing artists). 26 U.S.C. §67.
In addition, the Tax Cuts and Jobs Act of 2017 still suspends all moving expenses including standard mileage deduction (except for members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station). 26 U.S.C. 217.
The IRS announcement only modifies the rate for standard mileage only and does not impact any eligibility for standard mileage. Only an act of Congress can modify any qualifying conditions to claim standard mileage.
OUR TAX PROFESSIONALS ARE HERE TO HELP
Our law firm is committed to staying on top of developments in both federal and state tax law. If you have further questions about tax deductions or you need legal representation, then do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.
