Posted by Eastern Insuring Agency on
Announces 2023 Standard Mileage Rates
On Dec. 29, 2022, the IRS announced the 2023 optional standard mileage rates, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
The 2023 standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 65.5 cents per mile driven for business use, up three cents from the midyear rate for the second half of 2022;
- 22 cents per mile driven for medical purposes or for moving purposes for qualified active duty members of the Armed Forces, unchanged from the midyear rate for the second half of 2022; and
- 14 cents per mile driven in service of charitable organizations. The rate is set by statute and remains unchanged from 2022.
Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also 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.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
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.
Dec. 29, 2022
IRS announced the standard mileage rates for use in 2023.
Jan. 1, 2023
New standard mileage rates go into effect.
Taxpayers may use the actual costs of operating their vehicle in calculating the deduction, instead of using the IRS standard rate.
This Legal Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2022 Zywave, Inc. All rights reserved.Filed Under: Commercial Insurance News Updates | Tagged With: IRS Annoucment, IRS Mileage