The IRS announced it will increase the standard mileage rate to 62.5 cents per mile for business activities, a 4 cent increase from the earlier in the year, beginning on July 1, 2022. It will increase the standard mileage rate for moving and medical to 22 cents per mile, which is also a 4 cent increase from earlier in the year. There was no increase for mileage related to charitable contributions, as that remains at 14 cents per mile.
I cannot recall another time that the IRS has made a mid-year adjustment to the standard mileage rate, but it is much-needed as inflation and the cost of gas have been consistently on the rise. Although taxpayers will get the added benefit of an increased deduction, it is more important than ever to keep an accurate mileage log. At the end of the year, you will be required to separately state the mileage from January-June and July-December in order to apply the appropriate rates to each.
I can already see many taxpayers simply taking 50% of their yearly mileage for each time period, but that is not how mileage should be tracked or applied. If you haven’t been tracking mileage contemporaneously, start now! This will greatly reduce the headache at the end of the year and provide the needed documentation for your records.
If you would like to read the complete announcement, it can be found here: https://www.irs.gov/pub/irs-drop/a-22-13.pdf