In the latest Weekly Wright Report:
- The IRS Recognizes the Rising Gas Prices in Rare Mid-Year Mileage Rate Adjustment
The IRS Recognizes the Rising Gas Prices in Rare Mid-Year Mileage Rate Adjustment
On June 13, 2022, the AAA reported that the national average for a gallon of gas surged and is 15 cents more than a week ago, 58 cents more than a month ago, and $1.94 more than a year ago. The national average price for a gallon of gas as of June 13 was $5.01—an all-time high never seen since AAA began collecting pricing data in 2000. In response to rising gas prices, the Internal Revenue Service announced an increase in the standard mileage rate for the final 6 months of 2022. Taxpayers may use the standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.
For the final 6 months of 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year. These new rates become effective July 1, 2022. In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2022. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. Midyear increases in the mileage rates are rare. Indeed, the last time the IRS made such an increase was in 2011. The IRS Commissioner stated “[w]e 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.” For travel from January 1 through June 30, 2022, taxpayers should use the previous rate of 58.5 cents.
If you have questions regarding the issues discussed in this post, please do not hesitate to contact Michael A. Stover, Esq. (firstname.lastname@example.org)