High Gas Prices Cause IRS to Increase Mileage Deduction Rates

Gas prices have caused the IRS to make an unusual mid-year increase to the standard mileage rate used to deduct the cost of business-related driving. The mileage increase, linked to rising fuel prices, will begin July 1 and rises to 55.5 cents a mile. The current reimbursement rate is 51 cents a mile.

“This year’s increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices,” said IRS Commissioner Doug Shulman in a press release. “We are taking this step so the reimbursement rate will be fair to taxpayers.”

The standard mileage deduction is limited to companies using four or fewer vehicles. For larger companies ineligible to take the deduction, the IRS standard mileage figure is widely used as a benchmark in setting reimbursement rates for employees’ driving expenses.

Taxpayers can choose to keep track of their precise expenses or use the standard mileage rate when calculating their business costs.

For businesses operating a fleet of vehicles, FieldLogix offers an IFTA-only plan, designed to make IFTA fuel tax reporting simple and affordable. The  IFTA fuel tax reporting plan makes calculating IFTA taxes a breeze because the fleet tracking system automatically tracks everything your accountants will need to determine the amount of taxes your fleet owes in each state.

With the FieldLogix IFTA-only plan, determining the mileage driven in each state and fuel expenses for each vehicle can be automatically uploaded into a fleet’s tax software. Therefore, the proper IFTA paperwork can quickly be produced.