Reacting to Gas Prices, IRS Raises Mileage Payment to 48.5 Cents
WASHINGTON, D.C. — In response to the sharp jump in gas prices, the Internal Revenue Service is raising the standard mileage reimbursement rate by eight cents to 48.5 cents a mile, the single-largest increase ever, according to the Baltimore Sun newspaper. The new rate will be retroactive, applying to business travel from Sept. 1 through the end of this year.
Workers who use their vehicles for business can deduct their actual expenses or the standard mileage rate on tax returns. The federal government and many private employers use the IRS rate when reimbursing workers who use their cars on the job.
The IRS sets the rate each fall for the following year, but IRS Commissioner Mark Everson said this is the first time he could recall that the agency had raised the mileage rate in midyear, according to the Baltimore Sun article.