IRS 2023 Mileage Rates: Your Miles Are Worth More!

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.

IRS 2023 Mileage Rates

The IRS has officially released the federal standard mileage rates for 2023:

• 65.5 cents per business mile, which is 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, which is consistent with the midyear increase of the final six months of 2022.
• 14 cents per mile for charity drives, which is a flat from last year.

Why Did The Mileage Rates Change?

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.

How Can I Use The 2023 Standard Mileage 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.

How Do I Track Mileage?

If you plan to take a mileage deduction, you must keep a record of:

• Your mileage
• Dates of your drives
• The places you drove for business (this doesn't have to be an exact address)
• The business purposes of your trips.

The IRS will also want to know your beginning odometer reading, your commuting mileage and your personal non-commuting mileage.

Can I Use Apps To Track My Mileage?

Yes, apps like MileIQ produce mileage logs that can be used for your deductions. With automatic mileage tracking, MileIQ also means you don't have to start and stop tracking with each trip.