In mid December 2021, the IRS released the standard mileage rates for the use of a car (also vans, pickups or panel trucks) beginning January 2022 will be:
- 58.5 cents per mile driven for business use, up 2.5 cents from the rate for 2021,
- 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the rate for 2021 and
- 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2021.
Note that business owners can select the greater of a) actual automobile expenses or b) the standard mileage rate for the tax year. Note that the actual automobile expenses might include the following (each case is different):
- Lease payments
- Auto insurance
- Maintenance (such as oil changes, brake pad replacements, tire rotations)
- New tire purchases
- Title, licensing, and registration fees (not deductible in all states; check with TurboTax to see if this expense is deductible in your state)
- Vehicle depreciation (use a depreciation table to calculate the amount, and then deduct only the portion that applies to the business use of your vehicle)
Remember use the option that is more advantageous and generates the higher amount of deductions.
IR-2021-251, Standard Mileage Rates for 2022 – Link: https://www.irs.gov/pub/irs-drop/n-22-03.pdf