Do you deduct the cost of using your personal vehicle for business purposes on your taxes? If so, you’re probably familiar with the standard mileage rate, otherwise known as deductible mileage or mileage per diem.
When doing your business accounting, you likely take this rate into account, and every year, the IRS updates what this rate will be for the coming year. In 2022, the standard mileage rate was 58.5 cents per mile driven for business use at the beginning of the year. The rate was increased again later in 2022 to 62.5 cents per mile.
The IRS recently announced their standard mileage rate for 2023, and it is up three cents from the mileage rate the IRS set in the second half of 2022. For 2023, the standard mileage rate is 65.5 cents per mile driven for business purposes. This rate applies to hybrid-electric automobiles, electric vehicles, gasoline vehicles, and diesel-powered vehicles.
Note that even though you can use the standard mileage rate, you always have the option to calculate the actual cost of using your car for business purposes when filing your taxes. You do need to select which method you are going to use for claiming this deduction as you cannot use both.
Do you have any questions about the standard mileage rate and incorporating it as you figure out your business’ accounting, taxes, and expenses? We can help. Contact us at Balanced Bookkeeping of NC today to learn more.