IRS Mileage Rate 2023
The IRS has published the official 2023 rates for reimbursable and deductible mileage.
Many will be happy to know the rate per mile for business-related trips has been raised with 3 cents from last year. The rates for medical and moving mileage remain the same as during the second half of 2022.
What is the IRS mileage rate for 2023?
The 2023 IRS mileage rates are:
- 65.5 cents per mile for business purposes
- 22 cents per mile for medical and moving purposes
- 14 cents per mile for charitable purposes
See the IRS announcement on the 2023 rates.
As largely expected, the IRS has increased the rate for business miles as it has certainly not become any more affordable to run and maintain a vehicle in the US compared to last year.
In mid-2022, the IRS raised the year’s mileage rates due to spiking gas and car maintenance prices. While it is not unprecedented for the IRS to change the rates mid-year, the decision was welcomed by all who often drive for work-related duties.
The increase in the 2022 mileage rate was 4 cents, bumping the mileage rate up from 58.5 to 62.5 cents per business mile. The moving and medical rate also went up by 4 cents, from 18 to 22 cents per mile.
Why did the IRS mileage rate 2023 go up?
The IRS revisits the official mileage rates each year and takes into account both fixed and variable expenses such as fuel, repairs, insurance, road tax and more. Last year saw a rise in fuel costs and inflation throughout the country, resulting in the rates being updated from July 1st, 2022. While gas costs are not on the same upward trend as in 2022, many other costs for maintaining automobiles remain high, resulting in a higher mileage rate for 2023.
Who can use the IRS mileage rate 2023
The 2023 mileage rate for business is set to benefit those who drive for work with their personal vehicles and cover the associated costs themselves.
As a self-employed individual, you can claim your business mileage for 2023 at tax time from the IRS at the beginning of the following year. Read more about claiming mileage from the IRS as self-employed.
If you are employed, it becomes a bit more complicated - according to the Tax Cuts and Jobs Act, employees cannot deduct mileage from the IRS, even if their employer doesn’t reimburse them for business-related driving. That means the only reimbursement for out-of-pocket business mileage expenses can come from your employer. While it is advisable that employees use the official IRS mileage rate 2023, note that they are not obliged to, and may reimburse you at a lower rate, or reimburse actual expenses so long you have proof in the form of receipts. Find out more about mileage reimbursement for employees.
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