The IRS issued 2023 optional standard mileage rates used to calculate deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning January 1, 2023, the standard mileage rates for use of a car, including 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.
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.
Under the Tax Cuts and Jobs Act (TCJA), you 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.
Taxpayers should work with their tax advisors to make sure they are taking full advantage of the tax breaks, consistent with IRS regulations.