The 2023 mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes have increased or remained unchanged from mid-year changes in 2022, when rates were last modified. Specifically, as of January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

• 65.5 cents per mile driven for business use, up three cents from the rate for the latter half of 2022;
• 22 cents per mile driven for medical, or moving purposes for active duty members of the Armed Forces, unchanged from the rate for the latter half of 2022; and
• 14 cents per mile driven in service of charitable organizations, unchanged from the rate for the latter half of 2022.

The IRS standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. The charitable rate is based on a statute.

Note that taxpayers can calculate the actual costs of using their vehicle rather than using the standard mileage rates when such expenses are deductible.

The rates are important because most employers use the standard rate for business as the reimbursement rate for employees who drive their vehicles in connection with performing work. However, employers should note that, just like deductions for taxpayers, employees can opt to calculate their actual mileage expenses instead of using the IRS rate.

The author would like to gratefully acknowledge the assistance of Joanne Warriner.