(The Center Square) – Motorists are paying gas prices 62% higher than last year, and the Internal Revenue Service Thursday announced a 7% increase in the optional standard mileage rate for the final six months of 2022.
Beginning July 1, the standard mileage rate for business travel will be 62.5 cents per mile, an increase of four cents from the 58.5 cents that’s been effective since Jan. 1. It’s the the highest rate ever, and the first time since 2011 the IRS increased the rate in the middle of the year.
The new mileage rate for deductible medical or moving costs will be 22 cents for the remainder of the year, also an increase of 4 cents. The rate of 14 cents per mile for charitable organizations remains unchanged, as the amount is set by statute.
Taxpayers use the IRS standard mileage rate to calculate the deductible costs of operating an automobile for business and other purposes. Many businesses use the rate to reimburse employees for mileage using personal automobiles.
“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” IRS Commissioner Chuck Rettig said in a statement. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate.”
In addition to fuel costs, the IRS considers depreciation, insurance and other fixed and variable costs to determine the standard mileage rate.
The national average for a gallon of regular gas was $4.970 Thursday, according to the AAA gas prices report, and $4.553 in Missouri, the highest average price ever recorded in the state.
Last year, the average national price was $3.067 per gallon, and Missourians paid an average of $2.758.