Mileage Reimbursement Rate for 2023: What To Expect
A commute or business trip can be more than just a part of your daily grind, but can also help you get more out of your tax return. If you are driving consistently for business purposes, start tracking your mileage — you can deduct the cents per mile rate set by the IRS. Your miles just became business miles, so make sure you are getting the most out of your, well, mileage.
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2023 Mileage Reimbursement Rate
The IRS announced that as of January 2023, the standard mileage rates of a car, van, truck or other vehicles for business would increase. Here are the 2023 mileage reimbursement rates:
- Business use: 65.5 cents per mile. This mileage rate for business increased by 3 cents from 62.5 cents per mile in 2022.
- Military medical or moving: 22 cents per mile. Qualified active-duty Armed Forces members can deduct these miles.
- For example, if you were injured while serving and have to frequent a medical or rehabilitation center, you could apply this rate. This also can be used to cover moving expenses for military personnel and families.
- Charitable organizations: 14 cents per mile. This is the same rate effective for 2023 as it was in 2022.
How To Calculate Mileage Costs
In order to get the most bang for your buck, it is important to know how to calculate your mileage costs. Here is the breakdown for the two most common ways to use the standard mileage rate: self-employed tax deductions and employee mileage reimbursements.
Self-employed Tax Deductions
It is vital to keep track of your mileage for the tax year, which you can do either manually in a spreadsheet or by getting a tracking app for your phone or another mobile device. When it comes time to file your taxes, here is how you would calculate your miles.
- Total up your miles. For this example, your total is 500 business miles.
- Multiple that number by the $0.655 standard mileage rate for business.
- 500 business miles multiplied by $0.655 is 327.5
- Your deduction would be $327.50.
You can use this method of calculation for military and charity miles, too — just swap out the business mileage rate for the applicable rate.
Employee Mileage Reimbursements
You can also follow the same calculation of multiplying your business miles by the standard mileage rate and get reimbursed by your employer. Check with your company to see what their policies are for this, since rates may vary.
However, if you are driving a lot for work, you should be compensated for a percentage of your mileage — so make sure to take advantage.
Final Take: Manage Your Mileage
The cost of all the miles you put in for your job does have to come entirely out of your pocket. Don’t wait until the end of the tax year to try and figure out how many miles you have driven for business purposes. Instead, keep a daily log in Google Sheets or Quickbooks, or look into downloading a tracking app such as Zoho Expense, Everlance, Rydoo or Shoeboxed.
- What is the mileage rate for 2023 for truck drivers?
- Truck drivers get the standard mileage rate of 65.5 cents per mile. This rate increased from 62.5 cents per mile as of January 2023.
- To figure out your deduction, take the number of miles driven for business and multiply it by this rate. For example, if you drove 10,000 miles for work, your deduction would be $6,550.
- How do you calculate mileage costs?
- To calculate your mileage costs, you simply multiply the number of miles you drove by the cents per mile rate that applies to you: 65.5 cents for business miles, 22 cents for military miles or 14 cents for charity miles.
- What are the best mileage-tracking apps?
- Many mileage tracking apps can help you easily account for miles and expenses you have incurred throughout the tax year. Here are some highly recommended tracking apps to consider:
- – Everlance
- – Rydoo
- – Zoho Expense
- – Shoeboxed
Information is accurate as of Feb. 15, 2023.
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- Internal Revenue Service. 2022. "IRS issues standard mileage rates for 2023; business use increases 3 cents per mile."