IRS Increases Mileage Rate

July 6, 2022

Last month, the Internal Revenue Service (IRS) announced an increase of 4 cents to the optional standard mileage rate. Increased due to rising gas prices, the business travel rate is now 62.5 cents per mile, deductible medical expenses are now 22 cents per mile, moving expenses for active-duty members of the Military are also bumped up to 22 cents per mile, and the new rates are effective through Dec. 31, 2022.

This optional mileage rate is typically used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. For some additional context, it’s rare for the IRS to issue a midyear increase for the optional mileage rates, with the last adjustment midyear made in 2011, when gas was $3.52 per gallon (up from an annual average of $2.38 in 2010), and the unemployment rate was 8.9 percent.

For more information, the IRS provided legal guidance on the new rates in Announcement 2022-13, issued on June 9, which you can read here.