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Automobile Standard Mileage Rates

January 13, 2023

Generally, businesses can deduct the cost of operating an automobile for business use. They may also choose to use the standard mileage rate method to calculate automobile expenses. The deduction is calculated by multiplying the standard mileage rate by the number of business miles driven. Self-employed individuals and employees, who receive no or partial reimbursement from the employer, may use this method.

The standard mileage rate method simplifies recordkeeping because taxpayers don’t need to keep records of actual expenses. The business standard mileage rate considers costs such as maintenance and repairs, gas and oil, depreciation, insurance, and license and registration fees.

In 2023 and 2022, the standard mileage rates for the use of a car, including vans, pickups, or panel trucks are:

The Tax Cuts and Jobs Act (TCJA) suspended miscellaneous itemized deductions and deductions for moving expenses except for certain taxpayers. The suspension is effective for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026 (suspension period).

  • Business expenses:

    • Unreimbursed business expenses subject to a 2% floor as an itemized deduction have been eliminated.

    • Eligible taxpayers for business mileage expenses:

      • Members of a reserve component of the U.S. Armed Forces,

      • State and local government officials paid on a fee basis, and

      • Certain performing artists

  • Moving expenses:

    • Eligible taxpayers for moving expenses:

      • A member of the Armed Forces of the United States on active duty, and

      • Moving under a military order and incident to a permanent change of station.

If a taxpayer qualifies to use both the standard mileage rate method and the actual expense method, he or she may choose the method which results in larger deductions. If the actual expense method is chosen, the taxpayer needs to maintain adequate records of sufficient evidence to substantiate the actual expenses.


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