IRS mileage is a term used to refer to the tax deduction employees, self-employed and business owners can claim for their business-related mileage.
Every year, millions of individuals use their personal cars for work-related driving. In the case of your employer not reimbursing you for these expenses, the IRS has set up a mileage deduction scheme.
IRS mileage is deducted on a cents per mile basis. The tax authority sets a standard mileage rate each year which is meant to cover all costs of owning and operating your vehicle for business purposes. These costs include lease payments, road tax, insurance, fuel, maintenance and repairs among others.
The mileage rate is decided by the IRS each year based on the cost of owning and operating a vehicle in the United States.
The IRS mileage deduction scheme works in the following way:
- You record your business mileage throughout the year in IRS compliant records.
- Once the tax year is done, you multiply the driven mileage by that year’s mileage rate to figure out the deduction you can claim.
- You claim the mileage deduction on your tax return.
The 2023 mileage rate is 65.5 cents per mile for business-related driving.
The 2022 mileage rate set by the IRS was 58.8 cents per mile. From July 1, 2022 the IRS increased the rate to 62.5 cents per business mile.
If your employer reimburses you for your mileage, you are not able to claim mileage from the IRS.
Learn more about how you can claim IRS mileage depending on your situation in our IRS mileage guide.
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