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December 30, 2022 - 2 min read

The IRS Mileage Rate Explained

In this article, you can learn more about why the IRS sets a mileage rate each year and how, what the rate is meant to cover, and how to use it. The IRS mileage rate, also known as the federal mileage rate is set each year and is meant to help those who use their personal vehicles for business purposes get reimbursed for those expenses.

How the federal mileage rate is set

Each year's mileage rate is based on an examination of the previous year's costs of owning and driving a vehicle in the United States.

According to the IRS, "the standard IRS mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs."

Examples of variable costs include gas, oil changes, parking, tire change, getting a new battery, and other necessary components. Examples of fixed costs are insurance, license, registration fee, and taxes.

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What the IRS mileage rate covers

The IRS mileage rate is designed to cover all expenses of owning and running your vehicle, but only for business purposes. Some of these costs include:

  • Leasing payments
  • Insurance
  • Vehicle tax
  • Maintenance of your vehicle
  • Gas and oil
  • Car tyres

The federal mileage rate 2023

  • 65.5 cents per mile for business-related driving
  • 22 cents per mile for medical and moving purposes
  • 14 cents per mile for charity-related miles

The federal mileage rate 2022

The IRS has announced new federal mileage rates for 2022, applicable from July 1st:

  • 62.5 cents per mile for business-related purposes
  • 22 cents per mile for medical and moving purposes
  • 14 cents per mile for charity-related miles (remains unchanged)

For any mileage in 2022 before July 1st, the following rates apply:

  • 58.5 cents per business mile
  • 18 cents per mile for medical or moving purposes
  • 14 cents per mile for miles driven for charitable and volunteering purposes

Learn more about how and when to use the medical and charity rates, or find the 2021 mileage rates.

The federal mileage rate for previous years

Year Business Charity Medical & Moving
2023 65.5 14 22
Jul 1- Dec 31, 2022 62.5 14 22
Jan  - Jun 30, 2022 58.5 14 18
2021 56 14 16
2020 57.5 14 17
2019 58 14 20
2018 54.5 14 18
2017 53.5 14 17
2016 54 14 19
2015 57.5 14 23
2014 56 14 23.5
2013 56.5 14 24
2012 55.5 14 23
Jul 1 - Dec 31, 2011 55.5 14 23.5
Jan 1 - Jun 30, 2011 51 14 19
2010 50 14 16.5
2009 55 14 24
Jul 1 - Dec 31, 2008 58.5 14 27
Jan 1 - Jun 30, 2008 50.5 14 19
2007 48.5 14 20
2006 44.5 14 18
2005 40.5 14 15
2004 37.5 14 14
2003 36 14 12
2002 36.5 14 13
2001 34.5 14 12
2000 32.5 14 10
1999 31 14 10
1998 32.5 14 10
1997 31.5 12 10

How to use the IRS mileage rate

Use the IRS mileage rate to receive mileage reimbursement or deductions for the business-use portion of driving your vehicle.

The most common way for companies to reimburse employees for business-related driving is through the federal mileage rate. Each month, you report the business mileage you’ve driven and receive reimbursement equal to the IRS mileage rate for each mile.

As a self-employed individual, you can deduct your business mileage expenses from your annual tax return. Using the mileage rate set by the IRS, calculate the business mileage you’ve driven throughout the year you’re claiming for and multiply by that year’s set government mileage rate.

FAQ

The mileage rate is a rate set by the IRS to cover the expenses of using one’s personal vehicle for business purposes. The rate is set to cover all costs of owning and operating the vehicle for the business portion of its use.
The IRS reevaluates the standard mileage rate each year to make sure it can cover the expenses of owning and running a vehicle. The mileage rate is changed almost every year.

How to automate your mileage logbook

Manually filling out your logbook can get tedious - see how to automatically track trips for your mileage reimbursement or deductions.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for, legal, tax or accounting advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal, tax or accounting advisor.
IRS Mileage Guide
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