With a new year comes changes to mileage rates. This year, due to inflation and gas prices we are seeing a larger jump in the rates. If you remember our blog back in the summer, the IRS announced a midyear increase from 58.5 cents per mile to 62.5 cents per mile for business travel. That was a 4-cent increase, and with the new year, you’re going to see a very similar increase.
Here are the new mileage rates for 2023:
Business Use: The new rate is 65.5 cents per mile, up 3 cents from the mid-2022 increase.
Medical or Active-Duty Members of Armed Forces Moving Use: The new rate is 22 cents, which is up 4 cents from the beginning of 2022.
Charitable Use: This rate remains the same at 14 cents per mile.
A few things to note:
- The above rates apply for electric, hybrid-electric, gasoline, and diesel-powered vehicles.
- With the Tax Cuts and Job Acts, most taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses.
- Only Active-Duty Members of the Armed Forces who are under orders to a permanent change of station qualify for the moving mileage deduction.
As mentioned in our previous mileage rate increase blogs, below is a reminder of what mileage qualifies:
Driving to and from work does not qualify for business use mileage. However, if you are required to use your own vehicle to drive to customers or to different locations for meetings, those miles would qualify.
If you have a lot of medical issues, you may benefit from keeping track of your medical-related mileage. This would include driving to get to doctor and dentist appointments, picking up prescriptions, and getting to therapy sessions.
If you volunteer for a charity, you can deduct the miles you drive to get to and from the organization’s location. Besides deducting mileage, you can also deduct any parking or tolls that you may encounter during the drive. As a reminder, in order for the mileage to be deductible, the organization must be registered as a tax-exempt organization. Find out if the organization you volunteer at qualifies.
As we get closer to the end of January, you also want to think about getting your taxes done early. Give us a call today to schedule your tax appointment, or if you have any questions about the new mileage rates.