With gas prices on the rise, one welcome increase for some is the one set to impact the optional standard mileage rate for the final six months of the year.
From July 1 through December 31, 2022, the IRS increased the reimbursement rate for business use mileage to 62.5 cents per mile (from 58.5 cents in the first half of the year). Not only is a mid-year rate increase rare, but it is also the highest rate the IRS has ever published. At this point, the mileage rate for not-for-profit organizations remains at 14 cents per mile.
Employers still have the option of calculating the actual costs of employee vehicle use rather than using the standard mileage rates for reimbursement purposes. However, as a best practice, employers should consider immediate updates to policies and internal software before the new rate becomes effective on July 1, 2022. Action now will prevent the need to retroactively adjust employee reimbursements down the road.
Contact Alice Hottensmith at firstname.lastname@example.org or a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.