IRS Standard Mileage Rates for 2022

The IRS announced the optional standard rates that can be used for certain driving costs in lieu of deducting actual costs (Notice 2022-3). For 2022, the rate for business driving is 58.5 cents per mile, up 2.5 cents from 2021. The rate for driving for medical purposes—to the doctor, pharmacy, physical therapy, etc.—is 18 cents per mile, up two cents from 2021. The same rate applies for military personnel who qualify to deduct moving expenses pursuant to a permanent change of station. The rate for driving for charitable purposes, such as volunteering for Meals on Wheels, is 14 cents per mile. This is a statutory rate that is not adjusted annually for inflation.

If the standard rate for business driving is used, the basis of the vehicle must be reduced by a deemed depreciation rate. For 2022, it is 26 cents per mile, the same rate as in 2021. For example, if you are self-employed, drive your vehicle 15,000 miles on business in 2022, and use the standard mileage rate to substantiate costs, reduce the basis of the vehicle by $3,900 (15,000 x 26 cents).

Two points about using the standard mileage rate:

• In addition, you may deduct the cost of parking and tolls.
• You must still substantiate the date, miles, destination, and purpose for each trip. The standard mileage rate merely substantiates costs.