The IRS mileage rate
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.
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
- Vehicle tax
- Maintenance of your vehicle
- Gas and oil
- Car tyres
The federal mileage rate for 2022
This year’s business, charity, medical and moving mileage rates are as follows:
- 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, moving and charity rates.
The federal mileage rate for previous years
|Year||Business||Charity||Medical & Moving|
|Jul 1 - Dec 31, 2011||55.5||14||23.5|
|Jan 1 - Jun 30, 2011||51||14||19|
|Jul 1 - Dec 31, 2008||58.5||14||27|
|Jan 1 - Jun 30, 2008||50.5||14||19|
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.
How to automate your mileage logbook
IRS Mileage Guide
- Mileage rates 2020
- IRS mileage rate 2021
- IRS mileage rate 2022
- Is reimbursement taxed?
- IRS medical and charitable mileage
- For employers
- For employees
- Mileage log requirements
- What is the IRS mileage rate
- Calculate your reimbursement
- Current mileage rates
- For self-employed