Outsourced Accounting / IRS Establishes Mileage Rates for 2023

IRS Establishes Mileage Rates for 2023

The IRS has issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. In a statement issued on Dec. 29, the IRS said that beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) is:

  • 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.

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

Where the numbers come from

The IRS notes that the standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

The IRS is reminding taxpayers that under the Tax Cuts and Jobs Act, they cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

How BlueStone Services Can Help

Taxpayers should work with their tax advisors to make sure they are taking full advantage of the tax breaks, consistent with IRS regulations.

Turning accounting over to a team of accounting professionals ensures confidence in the accuracy and the quality of a business’s financial information. This peace of mind keeps management time focused on sales, customer relationships, and building value in the business, not accounting. For more information, please contact us. 

Keep informed
Receive tips on how you can use outsourcing to save time and improve your business processes.

Related Articles

01/17/2023

New Law Ushers in Major Retirement Changes

There’s been buzz about new retirement plan provisions for weeks, and now they’re final, bringing about changes to various federal rules

Read More  
12/05/2022

How Do Taxes Work With Bonuses?

Bonuses, frequently given at the end of the year, are a popular “thank you” for a job well done, and smart business owners know they can

Read More  
12/05/2022

Staying Current on Labor Rules

Hiring staff? Good for you! It means your business is thriving. Now is the time to get up to speed or reacquaint yourself with any labor laws

Read More  
BlueStone-logo