IRS Mileage Rate Changes for 2023
The IRS has published the official 2023 rates for reimbursable and deductible mileage, and many will be happy to know the rate per mile for business-related trips has been increased.
Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
- 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
- 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.
Why the increase?
The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. As 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.
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, rising inflation, supply chain interruptions and labor shortages are all contributing to increases in vehicle costs related to maintenance, insurance premiums and fuel, resulting in a higher mileage rate for 2023.
The increased rates apply to electric and hybrid-electric vehicles, as well as gasoline and diesel-powered vehicles.
Here are the 2022 mileage rate details:
Business:
- 62.5 cents per mile from July 1 – December 31
- 58.5 cents per mile from January 1 – June 30
Medical / Moving:
- 22 cents per mile from July 1 – December 31
- 18 cents per mile January 1 – June 30
Charity: 14 cents per mile from January 1 – December 31
Beginning January 1, 2023, businesses reimbursing their employees for personal use of their vehicle using a cents per mile program should look at updating their rate to the new standard.
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