In recognition of recent gasoline price increases, the IRS made a special declaration (IRS Announcement 2022-13): 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 at the beginning of the year. Here is information on how to take advantage of the 2022 update in mileage deduction on your taxes.
For business vehicles, using mileage at the IRS rate is an option in lieu of tracking actual costs like payments, gasoline, depreciation, and maintenance. Killingsworth Spencer’s CPAs work these numbers with each client each year and generally see mileage as the better and easier-to-track deduction, but we may see a swing to actual costs in 2022. Not using standard mileage in the first year of a car forever forecloses one from using actual expenses, so mileage is the best option for the first year, assuming the accelerated depreciation is not considered. Note that for 2022 the mileage deduction will need to be tracked in two parts: January – June, and July – December.
I’m Lynn Spencer with Killingsworth Spencer. To the contractors, gig workers, and all entrepreneurs, please consider now estimating the first half of 2022’s miles through June 30 and record it with your 2022 tax information. To learn more about the 2022 update in mileage deduction, contact me by phone at 404-369-0088 or fill out our inquiry form online.