Beginning July 1, the IRS mileage rate for 2022 has increased
Due to the increase in gas prices this year, the IRS has raised the mileage rate for business trips, medical trips, and active duty moves by 4 cents per mile. Charitable mileage rates will not change.
January 1, 2022 – June 30, 2022
July 1, 2022 – December 31, 2022
Medical & Moving
How does this affect you?
Small business owners who utilize the standard mileage rate will need to track mileage for the first and last halves of the year separately. It has always been critical to track these miles explicitly but will be even more important during 2022 due to the unusual mid-year change. If you date your trip logs accurately and consistently then this should be a straightforward process at tax time.
As a reminder, its good practice to take a photo of your odometer on the first and last day of each year. This year, it’s a great idea to snap a photo on July 1 as well so you’ll have a visual record at the time of the change and can easily account for the mileage on either side of that date.
IRS mileage log requirements
The IRS can and will deny mileage expenses without adequate and timely records. The best way to prove to the IRS exactly how much you drove for business purposes is to keep “contemporaneous” records. This means you maintain and update your records every day you drive for business, or within a reasonable timeframe.
Below is the information you’ll want to track:
The total mileage you drove during the tax year for business, commuting, and personal miles
The first and the last odometer readings of the tax year
The date of your business trip
The address of the business related location you visited (client, job site, etc.)
The purpose of your business trip
Although the IRS may allow for reconstructed records, you are not permitted to estimate your mileage. Again, if you don’t have adequate records, the IRS will disallow your entire mileage deduction, potentially costing your business significantly.
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