IRS increases standard mileage rate!
To reflect a continuing increase in gas prices, the IRS is increasing its standard mileage rate from 58.5 cents per mile to 62.5 cents per mile. The rate will increase from July 1st, 2022, halfway through the year. Taxpayers use the rate to calculate the "deductible costs of operating an automobile for business and certain other purposes" instead of tracking actual costs. It's also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. Business owners are required to keep a detailed log of their business mileage in order to take advantage of deducting the cost of their automobile use for business purposes.
When calculating the business mileage deduction, it will be important to keep track of miles driven in the first half of 2022 and the second half of 2022 separately. A mileage log is required for both automobile deduction methods - standard mileage v actual cost.