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A gas station trip lately might just be enough to send your anxiety spiraling. With gas prices continually rising and no end in sight, it can feel impossible to catch a break. But there’s good news for those eligible for the standard mileage deduction. The Internal Revenue Service reported an increase to the 2022 mileage rate, and it’s the highest rate ever offered. So if you drive for work and you’re a freelancer, gig worker or self-employed person, you might be eligible for some serious tax-saving mileage deductions.
The IRS mandate is to set standard procedures, deadlines and tax schedules. The agency usually announces standard mileage rates for the upcoming year in the fall of the prior year. So the IRS mileage rate 2021 was announced in the fall of 2020.
But on June 9 of 2022, the IRS did something out of the ordinary and announced an increase to the 2022 mileage rate by four cents. The last time the IRS announced a midyear price increase was in 2011. Now the current IRS mileage rate is 62.5 cents per mile. The IRS mileage rate 2022 falls into two categories: January 1-June 30 and July 1-December 31. So if you traveled between January 1 and June 30, you’d use the original federal mileage rate 2022, which is 58.5 cents per mile. Any eligible travel after June 30 qualifies for the increased mileage rate 2022.
Due to rising fuel prices and supply shortages, the IRS made the decision to increase the mileage rates. IRS Commissioner Chuck Rettig released a statement and said, "The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices. We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate."
How the standard mileage rate works
Using the IRS standard mileage rate, you can deduct the average costs of operating your vehicle and depreciation. But taking the standard mileage rate means you can’t deduct the actual expenses of operating your car.
With the standard mileage deduction, you’ll need to keep track of how many miles you drive for work. Then, you’ll multiply each mile by a standard amount set by the IRS. So your mileage reimbursement 2022 will depend on the total number of miles you drive.
If you’re wondering how to write-off gas using the standard mileage rate, it’s important to understand the process. The standard mileage method is a flat dollar amount based on the miles you drive.
If you’re self-employed, the IRS lets you deduct the miles driven for anything business related. However, if you commute to a W-2 job, the commuting miles won’t count as business mileage.
You can’t claim the actual cost of the gas unless you decide to itemize your deductions instead of taking the standard deduction rate.
Both keeping track of the miles you drive and calculating the deductible amount can be quite the task. But with the help of FlyFin, you can calculate your standard mileage deduction rate using a calculator.
FlyFin CPA Team
With a combined 150 years of experience, FlyFin's CPA tax team includes tax CPAs, IRS Enrolled Agents and other tax professionals, offering users the most comprehensive tax advice and preparation.