tGas prices have dominated headlines for the past year. After two years of coronavirus lockdowns, United State Residents were looking forward to restoring some form of normal life in 2022.
However, this was not the case with the country which is experiencing a cost of living crisis. While the shutdowns have contributed to supply chain shortages, the biggest problem has been the sanctions imposed on Russian oil imports in the wake of the country’s invasion of Ukraine.
The sanctions saw gas prices soar to record levels in June last year as the Federal Reserve was forced to implement a series of interest rate increases to curb inflation.
While this has somewhat stabilized the rapid growth in inflation, Americans across the country are still paying more for gas than they did before the pandemic.
In response to the gas price hikes that have plagued America during the first half of 2022, the IRS has decided to increase the standard mileage rate by four cents which means the current mileage for self-employed individuals is 62.5 cents.
What is the standard mileage rate?
As set by the Internal Revenue Services (IRS), the standard mileage rate allows self-employed individuals to write off a certain amount of tax for each mile of business trips taken.
Why did the IRS raise the standard mileage rate in June 2022?
The IRS increased the record mileage rate in June to help ease the financial burden on the nation’s residents.
“The IRS is adjusting standard mileage rates to better reflect the recent increase in fuel prices,” IRS Commissioner Chuck Rettig He said in an official press statement at the time of the increase.
“We recognize that a number of unusual factors have played a role in fuel costs, and we are taking this particular step to help taxpayers, businesses and others who use this rate.”
What is the standard mileage rate for 2023?
The IRS should make an announcement soon about the mileage rate for 2023.
However, since gas prices are dropping rapidly, it’s fair to assume that the mileage rate will remain flat in 2023.
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