The Internal Revenue Service has increased the vehicle mileage rate for 2023 when using a personal vehicle for business purposes. The rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning January 1, 2023, the new 2023 mileage rates will be:
- 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022
- 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022
- 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022
The new rates apply to both gasoline as well as electric and hybrid vehicles.
The IRS last increased the mileage rate in the middle of 2022 as part of a special increase to help offset the costs associated with skyrocketing gas prices.
The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
2022 Gasoline Prices
Although they are still high, gasoline prices have fallen somewhat from their peak during the summer months.
According to AAA, the national average for a gallon of regular gasoline is $3.16 as of December 29, 2022. This is down slightly from 1 year ago when it was $3.28 and even from a month ago when it was $3.52.
Gas prices have fallen for 7 weeks in a row now according to the Wall Street Journal. However, WSJ also notes that this trend may shift entering 2023, noting that contracts for wholesale gasoline futures have gone higher in the last few days in part because of the recent winter storm that disrupted some southern gasoline refineries as well as China easing its COVID restrictions.