IRS raises Mileage Deductible costs by 3 cents in 2023

According to the IRS the optional standard rate to deduct costs associated with operating an automobile in business will rise to 65.5c per mile in 2023. This represents a 3-cent increase over the current rate.

The new rates apply to electric and hydrogen-electric vehicles as much as to gasoline and diesel-powered cars. news release.

The IRS increased the deductible cost for automobiles used on business from 53.5c in 2017 to 58c in 2019. In January 2022, the IRS established the rate at 58.5c per mile. It then increased it by 4 cents in June 2022.

The IRS said The June mid-year rise in prices was due to the fuel price increases. According to the U.S. Department of Energy, the average cost of a gallon US of gasoline rose to $4.92 in June. This was the highest U.S. price ever. U.S. Energy Information Administration.

The average price per gallon of gasoline dropped from $4.92 to $3.20 in June to December. This was the lowest level since Oct. 20,21.