As most of you have heard by now, the IRS is increasing the standard mileage rate by four whole cents as of July 1.
While the IRS usually sets the optional standard mileage rates for computing deductible costs of operating an automobile only at the beginning of each calendar year, Thursday’s boost represented the third time since 2008 it has done so as of July 1 for the remainder of the year.
Effective for miles traveled on or after July 1, 2022, the standard mileage rate for purposes of deductible business expenses is 62.5 cents per mile, an increase of 4 cents from the 58.5 cents per mile applicable to travel between Jan. 1, 2022, and June 30, 2022.
The IRS press release cites climbing gas prices as the biggest reason for the unusual midyear change. “The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” said IRS Commissioner Chuck Rettig. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate.” Though fuel cost is a significant reason driving (heh) the increase, the IRS also credits depreciation, insurance, and other fixed and variable costs as part of the calculation leading to the mileage increase.
Though the IRS doesn’t mention it, the JofA says a couple letters from Congress to IRS Commissioner Charles Rettig may have had something to do with it, too; a March 25 letter by Sens. Catherine Cortez Masto, D-Nev., and Michael F. Bennet, D-Colo. asked Rettig to provide a midyear increase but did not specify when it should take effect, a May 13 letter signed by 18 Democratic members of the U.S. House of Representatives cited steep increases in gasoline prices since the beginning of 2022 as justifying an increase retroactive to March 1.
Neither congressional letter recommended how much the rate should increase, but they compared current gasoline prices to those in December 2021, when the IRS issued the 2022 rate in Notice 2022-3. Then, the nationwide retail average price was $3.40 per gallon, Masto and Bennet stated, which also is reflected in a graph on the website of the U.S. Energy Information Administration (EIA). The letter last week by the 18 representatives, citing the EIA, said the nationwide average in March 2022 was $4.30 per gallon.
Here are all new mileage rate numbers for the remainder of 2022 (starting July 1, and assuming the IRS doesn’t get bullied into hiking it again):
|Rates 1/1 through 6/30/2022
|Rates 7/1 through 12/31/2022
Chuck Rettig, we’re just gonna leave this here for you.
Photo by The Lazy Artist Gallery