IRS Raises Mileage Rate for Business Use

The Internal Revenue Service (IRS) recently announced the optional standard mileage rates for 2023. Effective Jan. 1, the business mileage rate has increased three cents per mile. This increase will affect the amount of money that self-employed individuals and businesses can deduct for qualified business-related travel expenses.

The standard mileage rates are used to calculate the deductible cost of operating an automobile for business, charitable, medical or moving purposes. The term “automobile” includes any car, van, pickup or panel truck, including those that are electric or hybrid-electric.

2023 Standard Mileage Rates

  • 5 cents per business mile
    • This is an increase of three cents from the midyear adjustment for the second half of 2022.
  • 22 cents per medical or moving mile
    • This rate is unchanged from the prior year and is meant to help taxpayers cover the cost of necessary medical travel and relocation expenses.
    • Moving expenses are currently only deductible for active-duty military members.
  • 14 cents per charitable mile
    • This rate is also unchanged from the prior year and is meant to help individuals and organizations cover the cost of providing volunteer services and donations to those in need.

The IRS encourages taxpayers to use the standard mileage rates for their deductions, as it is simpler and more efficient. However, taxpayers are free to use the actual costs of their driving expenses as an alternative to the standard mileage rate. In either case, taxpayers should maintain detailed records of their business, medical, moving or charitable miles driven throughout the year. Keeping accurate mileage logs help taxpayers maximize their tax savings by ensuring that accurate deductions are reported.

Contact an Adams Brown advisor with any questions about mileage rates.