November 26, 2021

IRS mileage rate 2022

4 MIN READ, UPDATED JAN 13, 2022

You may be wondering what the 2022 IRS mileage rate will be, how your reimbursement is going to change for you next year, what you should expect in reimbursement and more. Find the new mileage rate for 2022 below and information on how you can use it for your reimbursement. The IRS releases three standard rates each year that are used to calculate mileage deductions for business, medical/moving, and charitable purposes.

mileage log app

What is the new mileage rate for 2022?

  • 58.5 cents per mile driven for business use, up 2.5 cents from the rate for 2021
  • 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the rate for 2021 and
  • 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2021.

You can confirm the new mileage rate for 2022 on the official IRS website.

How do I use the 2022 IRS mileage rate? 

The new standard mileage rate for 2022 will be the one you need to use for calculating your reimbursement from January 2022 and forward until the end of the 2022 year. The new rate for business travel for 2022 is 58.5 cents per mile driven for business use.

It is also likely that if you are an employer, your employees will expect to get reimbursed based on the new reimbursement rate for 2022. Keep in mind that when reimbursing your employees you are not obligated to use the standard rate. Depending on your situation, car expenses, toll costs and other expenses you may want to reimburse your employees for less or more than the usual rate. In any case, it is useful to know the mileage rate for 2022 because anything you reimburse above it will be taxed. Below is an example of how you can calculate reimbursement with the 2022 IRS mileage rate. 

Example:

Let's imagine you take the new mileage rate for 2022 which is $0.585 per mile, but you believe that it is too low to reimburse your employees and you choose to reimburse them at $0.60 per mile. Now let’s imagine one of your employees drove 500 miles in 2022. 

500 x 0.585 = $292.5 This is the amount you can reimburse your employee tax free.

500 x 0.60 = $300 The actual amount you give to your employee for reimbursement.

This would mean that the 10$ difference will be taxed as income for the employee.

Additional rules for using the IRS mileage rate 2022 

  • For a car you own or lease, you can only claim standard mileage.
  • The mileage for each deductible use, the overall mileage for the year, and the date, destination, and purpose of each trip must all be recorded. We recommend you try using a mileage logbook for this. 
  • For the first year you use your vehicle you must use the standard rate, for following years, you can use the actual expense method.
  • If the standard mileage rate is chosen in the first year, leased vehicles must use it for the entire lease period, including lease renewals.
  • Unreimbursed employee travel expenses are no longer eligible for a miscellaneous itemized deduction under the Tax Cuts and Jobs Act (TCJA). Furthermore, moving-expense deductions are only granted to members of the Armed Forces on active duty who are transferring permanently.

How does the IRS decide on the federal mileage rate 2022? 

The mileage rate for 2022 is calculated by the IRS as they analyze the trends in business driving by using a large amount of data. There are a few different factors that influence the IRS’ decision for the new mileage rate. Some of these factors include:

  • The price of gas
  • Depreciation rates
  • Insurance rates
  • Vehicle costs 

The IRS tries to create a standard rate that aims to cover the costs you may incur while driving a vehicle for business purposes in 2022.

The new mileage rate for 2022 has increased with a total of 2.5 cents from the mileage rate in 2021 and is 58.5 cents per mile driven for business use. 

If you're driving your car for business purposes, you can claim a mileage tax deduction. The expense of commuting to and from work is not deductible.

Employees can't take the typical mileage reimbursement deduction if they drive to work somewhere other than their workplace. You can use the new mileage rate for 2022 for your business travel expenses from January 1st, 2022 and forward until the end of 2022. 


FAQ

1. What will the mileage rate be for 2022?

The rate for 2022 is 58.5 cents.
Standard mileage rates for using a vehicle, van, pickup, or panel truck for work purposes will be 58.5 cents per mile beginning Jan. 1, 2022. The rate is 2.5 cents higher than in 2021, but only half a penny more than in 2019, when it was 58 cents.

2. How can I use the standard mileage rate for my taxes?

You can calculate your mileage deduction using the IRS mileage rate. To calculate your deduction, simply keep track of your business mileage throughout the year and multiply it by the business rate. This does not apply if you are receiving a mileage allowance or if your employer reimburses you at a different rate than the standard. Find out more about how to calculate your mileage depending on your situation here.

3. Can I use the 2022 rate to claim reimbursement on company vehicles? 

No, it is important to remember that can only claim the reimbursement with the standard mileage rate for a vehicle you own or lease and that you must log your mileage properly if you want to be able to deduct it. If you have a company vehicle, your employer will likely set up a different reimbursement system with you.