IRS Standard Mileage Rates
Simply prepare and e-File your 2022 Tax Return on eFile.com and the eFile app will not only determine whether or not you can deduct your mileage, it will also calculate and report the deductible mileage on your return. The 2022 IRS mileage rate increased from the 2021 mileage rate. To learn more, find the details and explanations about deductible mileage rates and expenses below. Then, let's go and do your 2022 Taxes. We make Taxes
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Deduct Mileage for Work
What miles qualify for a tax deduction? For 2022 Tax Returns, you can deduct business miles or expenses if you are self-employed or an independent contractor and use your vehicle for work. This is reported on Schedule C for you when you file on eFile.com which is automatically generated for you as you work. The IRS has not set a limit or cap on he amount of deductible miles you can claim. Alternatively, you can deduct mileage expenses that relate to your work as an employee if any of the following apply to you:
- Qualified performing artist
- Fee-basis state or local government official
- Armed forces reservist
- Impairment-related work expenses
- Your employer entered code "L" for box 12 of your W-2.
You cannot deduct mileage expenses as a W-2 employee because miscellaneous, unreimbursed employee expenses are no longer tax deductible.
For a vehicle you own or lease, you can deduct either the actual expenses or the standard rate per mile driven. If the car is leased and you use the federal mileage rates, you must use the standard rates for the entire life of the lease. If you itemize the deductions, you can deduct these amounts from your taxable income. Find out what business miles you can deduct from your income. These mileage rates are optional and you can use the actual vehicle expenses instead of the standard mileage rate as your deduction if you kept detailed records, such as a mileage log.
The question is, how do you know which method is more beneficial for you? When you prepare your return on eFile.com, you can enter the information for both deduction methods and compare the results. eFile will show you which method yields a higher deduction so you can save the most money on your taxes.
The IRS also provides this criteria via Topic 510, Business Use of Car, in order to claim the standard mileage rate:
- During the tax year, you cannot operate five or more cars simultaneously
- You have not and will not be claiming a depreciation deduction for this car other than straight-line
- Straight-line depreciation is an annual depreciation in which the same deprecation deduction is used for the life of the asset. For example, if you depreciate a vehicle over ten years of your business, your deduction may be $500 per year and does not change year-to-year.
- Section 179 deduction has not and will not be claimed on the car
- A Section 179 deduction allows you to deduct the full cost of the asset as an expense rather than deprecate and deduct it over several years.
- The special depreciation allowance has not and will not be claimed on the car
- The special depreciation allowance is part of the 179 deduction which is a limit on the amount you can claim. In 2021, this was $18,200 if the asset was placed into service during the year; if the special allowance does not apply, the limit is $10,200. We will update this page once the IRS releases the 2022 figures.
- If you lease the car, you must not have claimed the actual expenses after 1997.
A key point here is that you cannot depreciate your business vehicle and claim the standard mileage deductions; you can generally only do one or the other. See more details on asset depreciation well as via IRS Publication 463, Travel, Gift, and Car Expenses.
Deductible Car Rates Per Mile
Below are the optional standard tax-deductible IRS mileage rates for the use of your car, van, electric vehicle, pickup truck, or panel truck for Tax Years 2007-2023. The federal mileage rates vary by tax year; generally they increase each year to adjust for inflation. The rates are categorized into business, medical or moving expenses, and service or charity expenses at a currency rate of cents-per-mile. If you need to prepare and file a previous year tax return, find and download tax forms for previous tax years.
During 2022, the IRS increased the mileage rates for medical and business expenses by four cents for the second half of the year. When you file your taxes, eFile will help you report this and get the highest deduction possible.
You can use the information below as a simple mileage calculator. When doing your calculations, multiply the miles you drove (business, charity, etc.) by the cent amount for the year in question. For 2022 Returns, the mileage deduction calculation for business miles would be:
(total business miles driven from January to June * 58.5) + (total miles from July to December * 62.5)
2022 Current Year Tax Returns due in 2023
1/1 - 6/30:
7/1 - 12/31:
1/1 - 6/30:
7/1 - 12/31:
1/1 - 6/30:
7/1 - 12/31:
2023 Tax Year Returns
due in 2024
51 cents (Jan. 1 - June 30); 55.5 cents (July 1 - Dec. 31)
19 cents (Jan. 1 - June 30); 23.5 cents (July 1 - Dec. 31)
50.5 cents (Jan. 1 - June 30); 58.5 (July 1 - Dec. 31)
19 cents (Jan. 1 - June 30); 27 cents (July 1 - Dec. 31)
Standard Mileage Rate Restrictions: The standard mileage rates may not be used for vehicles used as equipment, for a vehicle which has been claimed for a Section 179 deduction, or for more than four vehicles used simultaneously. You cannot use the standard mileage rates if you claim vehicle depreciation under the Modified Accelerated Cost Recovery System (MACRS). Instead, a portion of the rate is applied, equaling 26 cents-per-mile for 2022; 26 cents in 2021; 27 cents in 2020; and 26 cents in 2019.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile; the standard rate for medical and moving purposes is based on the variable costs as determined by the same study. Runzheimer International, an independent contractor, conducted the study for the IRS. The mileage rate for charitable miles is set by law.
Mileage rates are not the extent of your deductible expenses for the business use of your car. Remember to include parking and tolls! See below.
Additional Vehicle Use Deductions: In addition to the standard mileage rates, you may deduct the costs of tolls and parking while using your vehicle for one of the approved purposes - these are separate deductions. However, if you have claimed vehicle depreciation, you may not deduct tolls and parking fees. For cars used by employees for business use, the portion of the standard mileage rate treated as depreciation is 26 cents per mile for 2022.
Did you know that you can also claim a tax credit for buying a hybrid or electric vehicle? The federal EV tax credit may earned you up to $7,000 back on your purchase.
Car Allowance and Mileage Reimbursement
Sometimes, an employer may offer an allowance or reimbursement if you use your vehicle for work. This can be done in two ways:
- Your employer pays you a vehicle allowance with your paycheck - usually a flat rate. This is considered taxable income and part of your gross pay.
- Your employer reimburses your mileage. If the employer follows the exact mileage rates based on a log kept by you as an employee, this may not be taxable.
Depreciation of Assets
Any equipment purchased specifically for your business is considered a capital asset. Because of this, vehicles are not the only business property which can be depreciated on a tax return; this also includes property like buildings, tools, computers, and furniture. The property or asset must be owned by you, used with the intent to produce income for your business, have a determinable useful life, and it must last or be expected to last more than one year.
This can be property that is used partially for business and partially personal use; for example, if you use your personal vehicle to travel for business. Depreciation begins when the property is placed into service and is claimed each year until it is either retired from service or you have fully recovered the cost or other basis - whichever comes first.
There are a few methods to depreciating property; eFile.com will help you select the method that benefits you the most. Simply answer some questions regarding your vehicle or other property and we will help you select how you should depreciate it. Depreciation is reported on Form 4562 - eFileIT on eFile.com.
Most assets are depreciated through Section 179 deprecation. Beginning in 2022, the maximum 179 expense deduction is limited to $1,080,000, reduced by the amount exceeding $2,700,000 during the year it was put into service. Additionally, the 179 deduction is limited to $27,000 for the deprecation of sports utility vehicles.
To learn more about depreciation, see IRS Publication 946, How To Depreciate Property.
Deductible Business Miles
Deductible business use of your car does not cover normal commuting to your usual place of work. Qualified deductible business use includes:
- Driving to a business meeting away from your usual workplace
- Meeting clients or customers
- Getting from your home to a temporary workplace
- Getting from your regular workplace to a second workplace for the same job or business.
If you use your car only for your job or business, you may deduct all of the miles driven or actual vehicle expenses. However, if you also use the car for other purposes, you can only deduct the portion used for business purposes.
Normal commuting from your home to your regular workplace and back is not deductible. You may deduct business mileage only if you are traveling to and from a temporary work location, from one work location to another, to meet with a client, to a conference, etc.
Medical Transportation Expenses
Expenses for primary transportation to medical care facilities that qualify as medical expenses are:
- Actual fees or fares for a taxi, bus, train, or ambulance
- Out-of-pocket expenses for using your own car or the standard mileage rate
- Fees for tolls and parking.
Actual Car or Vehicle Expenses You Can Deduct
Instead of using the standard mileage rates, you may use the actual costs of operating your car by keeping accurate records. Qualified expenses for this purpose include gasoline, oil, tires, repairs, insurance, tolls, parking, garage fees, registration fees, lease payments, and depreciation licenses. Report these expenses accurately to avoid an IRS tax audit.
Keep records of your deductible mileage each month with a simple journal or mileage log. For your convenience, we have prepared a downloadable mileage log which you can print and fill out each month. You can use your mileage information to help you complete and e-File your 2022 Tax Return on eFile.com; the eFile app will determine whether or not you can deduct your mileage based on your answers to several simple questions. Then, the app will calculate your mileage rate for you and report it on your return.
Have more questions about deductible mileage rates and expenses? Ask an eFile.com Taxpert® your tax questions now!
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