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IRS Issues 2023 Standard Mileage Rates

IRS Issues 2023 Standard Mileage Rates

As of January 1, the standard mileage rates for 2023 are as follows:

  • 66 cents per mile driven for business use (up 3 cents from the midyear increase of 2022)
  • 22 cents per mile for medical care (consistent with the midyear increase of 2022)
  • 14 cents per mile for miles driven in service of charitable organizations (remains unchanged)

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

If you use your personal car for business purposes, you may be able to deduct the cost of owning and maintaining the vehicle. Generally, the deduction is based on either the standard mileage rate above or actual costs, such as gas, oil, repairs insurance, and registration fees.

To utilize the standard mileage rate, the following must apply:

  • You must own or lease the car
  • You cannot have claimed either Section 179 or Additional First Year (“Bonus”) depreciation
  • You cannot operate five or more automobiles at the same time

Remember, under the Tax Cuts and Jobs Act, taxpayers can't claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. The same applies for a deduction for moving expenses unless a member of the Armed Forces on active duty and moving under orders to a permanent change of station.

 

01/11/2023

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