News | IRS Releases the 2022 Standard Mileage Rate. Why Do We Care?
Dec 17, 2021
On December 17, 2021, the Internal Revenue Service issued the 2022 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Beginning on January 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 58.5 cents per mile driven for business use (this is up 2.5 cents from the rate for 2021).
- 18 cents per mile driven for medical, or moving purposes for qualified active-duty members of the Armed Forces (up 2 cents from 2021).
In affordable housing, these rates become a factor when calculating net income from some businesses households may be involved in (such as gigger economy drivers with Uber, Lyft, or Grubhub) or when calculating medical expense deductions for mileage to and from medical treatment or appointments for subsidized rent programs. As vehicle-related self-employment that may involve mileage is a HUGE emerging issue, we think that this is very timely!
Some interesting side notes: for business use of a vehicle, taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or another calculation based on actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.
Notice 22-03, contains the optional 2022 standard mileage rates, as well as a wealth of other details relating to IRS standard mileage rules.
Mileage Calculation Tutorial
for net income from a business
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Anticipated business income for 2022 with deductions for business use of a vehicle or
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Medical use deductions when calculating subsidized rent.
Example
Mitch is a driver with the food delivery service SlopHop. He has been delivering food with the app-based service for 5 months. His income certification will be effective February 1. He provides printouts from SlopHop of his gross income with taxable business deductions. The net income, not including any mileage, is $5,551.59. The printouts also list that he has driven 1,054 miles while working for the service.
Looking for quality affordable housing occupancy training? Check out our Succeed at Qualifying Households series of courses. There are options for all major Affordable Housing programs. You can read more HERE.
There is a very good chance that the topic of this post is covered in an online on-demand course at Costello University.
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