The IRS just announced the new standard mileage rates for 2023. There's good news if you drive for business, as your miles are worth more.
The IRS has officially released the federal standard mileage rates for 2023:
Every year, the IRS determines what your miles are worth for its rate. The IRS knows there's a cost with using a personal vehicle for business purposes, so it allows you to deduct that as a business expense.
You can tally your year's full expenses using the actual expense method or you can multiply your business miles by the standard mileage rate. While you do have to keep a mileage log, it's much easier to tally your miles for the year and then use this rate.
Simply keep a record of your business miles for 2023 and then multiply that number by 65.5 cents. For example, if you drive 15,000 business miles in 2023, your mileage deduction would be $9,825. Keep in mind, that's on top of all your other tax deductions. As you can see, the mileage deduction can go a long way toward lowering your taxable income and your taxes. This essentially puts money back in your pocket.
If you plan to take a mileage deduction, you must keep a record of:
The IRS will also want to know your beginning odometer reading, your commuting mileage and your personal non-commuting mileage.