Tax Guru – Ker$tetter Letter

IRS has released its standard mileage rates for the types of driving during 2023 that can affect taxes.

From today’s IRS news release:

Beginning on January 1, 2023, the 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 3 cents from the midyear increase setting the rate for the second half of 2022.
• 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
• 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

While these actual deductions won’t be claimed for more than a year, when 2023 tax returns are filed, the rates are useful for current situations, such as employee reimbursements and charges to customers by some businesses.

These rates are supposed to be for all miles driven during 2023. However, as we saw earlier this year, if there are major changes up or down in the costs to operate vehicles (fuel being the most common), these rates might be modified mid-year.