The IRS recently released guidance (Notice 2022-03) providing the 2022 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Beginning on Jan. 1, 2022, the standard mileage rates for the use of an automobile are:
- 58.5 cents per mile for business miles driven (up from 56 cents in 2021)
- 18 cents per mile driven for medical or moving purposes (up from 16 cents in 2021)
- 14 cents per mile driven in service of charitable organizations (no change from 2021)
In lieu of using the optional standard rates, taxpayers have the option of calculating the actual costs of using their vehicle—but only if taxpayers maintain adequate records or other sufficient evidence of the actual costs incurred.
The notice also provides the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate plan—which allows employees who use their own vehicles for business to receive tax-free reimbursements from their employers for certain fixed and variable costs—in addition to the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2022 to value the personal use for income inclusion purposes. In both instances, the maximum cost/fair market value for 2022 is $56,100 for automobiles, trucks, and vans (up from $51,100 in 2021).
Taxpayers using the optional standard mileage rates and other special rules addressed in the notice must comply with Rev. Proc. 2019-46, which made numerous modifications to the rules for using optional standard mileage rates and the substantiation rules for automobile costs in order to reflect the changes made by the Tax Cuts and Jobs Act.
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