The IRS Standard mileage rates used to calculate the deductible costs of operating a car (includes vans, pickups or panel trucks) for business, charitable, medical or moving purposes are shown in the table below. These are effective from Jan. 1.
| Year | Business Related Driving | Medical or Moving Purposes | Charitable Service Driving |
|---|---|---|---|
| 2023 (forecast) | 60 cents | 19 cents | 15 cents |
| 2022 | 58.5 cents | 18 cents | 14 cents |
| 2021 | 56 cents | 16 cents | 14 cents |
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The business mileage rate is based on an annual study of the fixed and variable costs of operating an automobile.
The rate for medical and moving purposes is based on the variable costs.
The charitable rate is based on statute and has remained unchanged for several years.
The IRS issues these optional standard mileage rates to enable business’ and individuals to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Under recent tax law, tax filers cannot cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, nor can they 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.
Taxpayers also have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
For 2016 0- Because of the 3.5 cent reduction in the business standard mileage rate and the 4 cent reduction in the moving expense mileage rate, employers reimbursing employees at the 2015 rates need to be mindful of the rate changes. To avoid having to include the extra 3.5 or 4 cents in employees’ income and the accompanying withholding and reporting responsibilities, employers should make sure they change to the 2016 rates for all affected travel on or after January 1, 2016. And remember that business standard miles or moving miles driven in December 2015 that show up on an employee’s expense report in 2016 are governed by the rules applicable to the corresponding 2015 mileage rates.