Back in June of 2022, the Internal Revenue Service (IRS) announced an increase in the optional standard mileage rate for the remainder of 2022. Business owners and taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.
This new rate is up 4 cents from the rate effective at the beginning of 2022, leaving it at 62.5 cents per mile. These changes became effective July 1, 2022. If you need guidance on the new rates, you can view the Announcement 2022-13 now.
This change can about thanks to the unusual and unexpected changes in fuel prices and is a special step to help taxpayers, businesses, and others who use this rate.
To make mileage tracking easy, we recommend using an app. We have two apps that we’ve found perform well for tracking mileage for business owners:
MileIQ is a program included in Microsoft 365 Business Premium subscription – although the app can be downloaded separately. MileIQ automatically records when you drive and sends reports to your email. Once you finish driving, the trip will show up in your MileIQ feed ready to be classified as either a business trip or personal.
Quickbooks Self Employed is an accounting and bookkeeping software that we recommend for most smaller businesses. Mileage tracking is simply one of its many features. And, as long as you have the automatic tracker turned on, it will automatically track and send reports like MileIQ.
Qualifying trips must have thorough logs that include required material by the IRS. Apps track and report this information automatically, but if you’re planning to forgo an app, you need to take note and track:
These documents and records will be necessary for your tax preparer during tax time to receive your deduction.
While the IRS sets the mileage rate for the year in the Fall of the previous year, we saw an increase thanks to unexpected changes in the economy and expenses. Here are the exact mileage rates for the end of 2022:
If you’re unsure if your business or your drives count towards your mileage rates and deductions for the year – or if you have forgotten to track your miles – consult with ModVentures today.