IRS Updates Standard Mileage Rate
The IRS issued guidance on December 29, 2022 regarding the upcoming standard mileage rates used to calculate deductible vehicle expense. As expected, due to inflation, mileage rates are up again from the mid-year increase that was issued in June 2022. For 2023, rates are as follows:
• 65.5 cents for business miles (This is an increase of 3 cents from the midyear increase for the second half of 2022)
• 22 cents for medical miles (No change from the mid-year 2022 increase)
• 14 cents for charitable miles (This rate is statutory and is unchanged from 2022)
Standard mileage rates for business are based on an annual study of the costs of operating a vehicle and are intended to include all the costs of operation such as fuel, repairs, license, depreciation, and repairs. Medical mileage rates are based on variable costs.
Kelly Jackson Hardy is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers, privately-held elevators and supply dealers, and cooperatives. Kelly is a principal with CliftonLarsonAllen in Princeton, Illinois, as well as a regular speaker at tax and estate planning seminars. Kelly was raised on a hog, row crop and cattle farm in central Illinois and has been involved in the ag industry her entire life. Kelly, her husband, and two sons are active in 4-H and operate a small feeder calf operation and pumpkin business.
Do you feel a partnership can use the mileage rate for partnership vehicles (if less than 5 vehicles)? Do you feel a partnership can reimburse partners for their business mileage using the mileage rate?