News & Updates

December 20, 2021
Certified Public Accountants and Consultants
Standard Mileage Rates for 2022
The IRS has issued the standard mileage rates for 2022 (Notice IR 2022-03). Taxpayers have the option of using these rates beginning January 1, 2022 as follows:

58.5 cents per mile - Vehicle usage as transportation for a business purpose
or business travel (includes cars, vans, pickups, or panel trucks). 
This rate may also be used by employers as the maximum
amount they can use to reimburse an employee using his vehicle
for a business purpose without substantiating the actual cost 
incurred by the employee. 
18 cents per mile - Vehicle usage for Medical purposes, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the 2021 rate and,

14 cents per mile - Vehicle usage for service for charitable organizations. 
In 2022, the standard mileage rate for business has increased 2.5 cents per mile from the 2021 rate. Likewise, the standard mileage rate for medical, as well as specifically allowed moving purposes, has also increased 2 cents per mile from 2021 rates.  Each year, these two rates are adjusted based on an annual study of various costs of operating an automobile.  The standard mileage rate for charitable service will remain the same since this rate is set by statue.

As always, taxpayers continue to have the option to calculate the actual costs of using their vehicle, instead of using the standard mileage rates. IR-2021-251 from the IRS also mentions, “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.” – December 17, 2021.

It is essential to know that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses and 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. They are required to use the 18 cents-per-mile business standard mileage rate, up 2 cents from 2021.
As stated in an article from the Journal of Accountancy, “self-employed taxpayers can deduct automobile expenses if they qualify as ordinary and necessary business expenses. They may also claim actual allowable expense amounts if they are able to validate the expenses which includes maintaining suitable records and other sufficient information. “The standard mileage rate also can be used as the maximum amount an employer can reimburse an employee for operating an automobile for business purposes without substantiating the actual expense incurred.”
For 2022, the portion of the standard mileage rate that taxpayers need to use in calculating reductions to basis for depreciation is 26 cents per mile, the same from 2021.
These new standard mileage rates should be incorporated when filing for the 2022 tax year. If you need any help determining which changes affect your business, we would be happy to assist you. Please do not hesitate to call or email at Griffing & Company, P.C. for help with these or any other questions you may have.
One Sugar Creek Center Blvd., Suite 650
Sugar Land, TX 77478
(281) 491-8866 Fax (281) 491-8998